As we launch into the 19/20 tax season, it is the perfect time to discuss our best tax tips for Aussie tradies and labourers.
If you’ve been doing your own tax returns and feel you aren’t claiming effectively, this is for you!
1.Tools and equipment
The general rule of thumb when it comes to tools and equipment for tradies is simple if you’ve paid for them and use them specifically for the job or business, they are generally tax deductible.
The difference in how much you can claim depends on whether you are self-employed or work for someone else.
You can cash in on the instant asset write-off scheme if your run your own business. This gets you an instant deduction claim of up to $30,000 worth of tools – only if purchased after 2 April 2019, if before 29 January 2019 the limit was $20,000 and if between 29 January – 2 April 2019 the write-off amount is $25,000.
If you are an employee, the deductible amount isn’t as generous. With an instant claimable amount of $300, asset purchases above this amount must be depreciated over its useful life as prescribed by the ATO.
2. Work Vehicles
Again, deducting expenses all depends on owning a business vs. being employed.
Much like tools and equipment, you can now instantly deduct (if you’re a business owner) a work vehicle if it costs less than $30,000 – vehicles over this amount must be depreciated over their useful lives.
As an employee you can only claim depreciation on a vehicle over its useful life, generally 8 years, proportionate to your logbook percentage of work-related use. Your logbook percentage will also be used to claim other work-related car expenses such as fuel and servicing.
BONUS TIP: If you travel less than 5000kms, you can claim 68c per business or work-related km travelled. Whilst a logbook is not necessary, it is always a good idea to keep a record of this travel throughout the year.
3. Laundry and dry-cleaning
A deduction we don’t think many tradies would think of…
The ATO have guidelines in place for laundry up to a maximum of $150. Your claim will depend upon the clothes washed and number of washes per week:
- $1/ load if made up of ONLY work clothing
- 50c/ load if there are non-work-related clothing included.
If you get an external party to wash, dry and iron your work clothes, you’re still able to claim laundry expenses but only to a total of $150 including laundry as above.
Stay on top your tax and be informed of what you can and can’t claim as a work-related deduction. For any further questions or queries, call ABA Tax on 1300 797 175 or email firstname.lastname@example.org.