Tradesperson Tax Return and Deduction Checklist
Tradesperson Tax Return and Deduction Checklist
Are you a tradesperson?
And, looking to optimise your tax return, ensuring you’re claiming all eligible deductions?
We can feel you. Between long hours on the job and the physical demands of the work, keeping track of the expenses can fairly be more effort-consuming.
But the good news is, with a little effort and organisation, you can claim a significant number of deductions and maximise your tax refund.
Although there are experts like KPG Taxation to guide you but, we have decided to share a blog on the common deductions you can claim.
This guide will be a great resource for handling individual taxation.
Why Claim Deductions?
Many tradies unknowingly miss out on hundreds, even thousands of dollars in tax deductions each year. These deductions represent legitimate work-related expenses that you shouldn’t have to pay tax on.
By claiming everything you’re entitled to, you’re essentially reducing your taxable income and getting money back from the government.
To get the most out of it, let’s start understanding the basics first.
Understanding The Basics Of Tax Deductions For Tradies
The Australian Taxation Office (ATO) allows you to claim deductions for work-related expenses you incur throughout the financial year. There are two key things to remember:
- You must have paid for the expense yourself. This means it wasn’t reimbursed by your employer.
- You need to keep a record of the expense. This can be a receipt, invoice, or bank statement.
To begin with your tax return, you’ll need an income statement from your employer, outlining your salary, wages, allowances, and bonuses for the financial year.
While you won’t require a physical copy, ensure your employer lodges it directly with the ATO. Once lodged, you can download the information to calculate your deductions accurately.
Common Deductions for Tradies
Deductions are expenses incurred during the financial year directly related to earning an income. Remember, you must have personally spent the money, and keep records such as receipts or invoices.
If you have fulfilled the requirements, then you can claim these deductions:
| Expense | Eligibility |
| Car or truck expenses | When transporting heavy tools or equipment to and from work sites |
| Transport expenses | Including parking fees and tolls for multiple job locations |
| Work clothing and protective gear | Items with company logos or offering protection like hard hats and gloves |
| Insurance for personal tools or equipment | If used for work purposes, partial deduction applies if also used outside work |
| Self-education costs | Courses, training, or seminars directly related to your current line of work |
| Union and professional association fees | Tax-deductible if related to your trade or profession |
| Licence renewal fees | Excluding initial costs |
| Overtime meal expenses | If included in assessable income under industrial law, award, or agreement |
| Phone and internet expenses | For work-related usage not covered by your employer |
| First aid training course | If designated as a first aid person and required for emergency work situations |
| Home office or workshop expenses | Including heating, cooling, and equipment repairs |
| Travel expenses | Accommodation and meals for work-related travel, excluding regular workdays |
Let’s have an in-depth understanding of the above deductions.
- Work-Related Phone and Internet: If you use your personal phone or Internet for work purposes, you can claim a portion of the associated costs. Be sure to keep track of how much you use it for work.
- Work Clothing and Safety Gear: You can claim the cost of clothing that has your employer’s logo or branding, or that provides essential protection like hi-vis vests, steel-capped boots, safety glasses, and gloves. Regular clothing (jeans, t-shirts) is not deductible, even if you only wear it to work.
- Tools and Equipment: The cost of purchasing, leasing, or repairing tools you use for your trade is deductible. This includes everything from power tools and toolboxes to ladders and tape measures.
- Laundry and Cleaning: The cost of laundering or dry-cleaning your work clothes (with logos or branding) is claimable.
- Sunscreen and Sunglasses: If you work outdoors, sunscreen and sunglasses are essential for protecting yourself from the sun. The ATO allows you to claim the cost of these items.
- Home Office Expenses: If you have a dedicated workspace in your home for administrative tasks related to your trade, you can claim a portion of your rent, mortgage interest, utilities, and even depreciation on furniture and equipment used in the office.
- Training Courses and Certifications: Upskilling yourself is crucial in the trades industry. The cost of attending courses, training programs, and seminars directly related to your trade can be claimed as a deduction.
- Union and Association Fees: Membership fees for your relevant union or professional association are generally tax-deductible.
- Travel and Accommodation: If your work requires you to travel away from home overnight (e.g., a temporary job in another state), you can claim expenses for travel, meals, and accommodation.
What You Can't Claim?
Despite having a lot of expenses to claim, there are expenses you can’t claim, such as regular clothing, driver’s licence renewals, entertainment, fines, employer-provided tools or equipment, and daily meal expenses.
Even though this blog has summarised the claims for you, lodging it correctly can still be an issue.
Require Expert Taxation Advice?
Tax deductions as a tradesperson can be a tough time to deal with. But with the tax agents at KPG Taxation, you can tackle this.
They will offer you the right guidance and ensure you maximise your refund while remaining compliant with ATO regulations.
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