What you can claim as a tax deduction if you’re a tradesperson

If you’re a tradie it pays to learn what you can claim as a tax deduction.

To claim a deduction for work-related expenses:

• you must have spent the money yourself and not be re-imbursed for the expenses
• it must directly relate to earning your income
• you must have the records to prove it.

You can only claim the portion of the expense that is directly related to earning your income.

Car expenses

You can’t claim the costs of travelling between home and work.

You can claim the cost of using your own car when you drive:

• directly between separate jobs on the same day
• to and from an alternate workplace for the same employer on the same day.

In limited circumstances, you can claim the cost of trips between home and work, where:

• you have no fixed place of work and you continually travel from one work site to another throughout your workday
• you carry bulky tools or equipment for work and all the following apply:
  • the tools or equipment are essential for your employment
  • the tools or equipment can only be transported using a motor vehicle
  • there is no secure storage for the items at the workplace.

There are two ways to claim car expenses, either the logbook method or the cents per kilometre method.

If using the logbook method, you need to keep a valid logbook so that you can work out the percentage of work-related kilometres.

If using the cents per kilometre method, you need to be able to show how you have calculated your work-related kilometres and that those kilometres were work related.

The logbook or cents per kilometre method cannot be used for vehicles with a carrying capacity of one tonne or more.  The actual costs can be claimed for the work-related use of you vehicle.

If you use one of the methods above for claiming work-related car expenses then you cannot claim any further deductions in the same tax return for the same car. E.g. petrol, servicing and insurance costs.

Travel expenses

You can’t claim a deduction if the travel is paid for, or you are reimbursed by your employer or another person.

You can claim travel expenses if you travel away from your home overnight while performing your employment duties.  Expenses can include meals, accommodation, fares, and any incidental expenses you incur when traveling for work.

Clothing and laundry expenses

You can’t claim the cost to buy, hire, repair, or clean conventional clothing you wear for work.  ‘Conventional clothing’ is everyday clothing worn by people – for example, drill shorts, jeans or plain shirts.

You can claim the cost to buy, hire, repair, or clean protective clothing.  E.g steel-capped boots, safety glasses or fire-resistant clothing.  If your employer pays for or reimburses you for these expenses then they cannot be claimed.

Tools and equipment expenses

You can’t claim tools and equipment that are supplied by your employer or another person.

You can claim the cost of tools and equipment you use for work, including repairs and insurance.

If the cost is more than $300 the deduction can be claimed over a number of years.  If $300 or less you can claim an immediate deduction for the whole cost.

If you also use the tools and equipment for private purposes, you can only claim the work-related portion.

Other expenses

You can’t claim private expenses such as drivers’ licence, music subscriptions, fines or child care.

You can claim the work-related portion of other expenses that relate to your employment, including:

• renewing your licence, regulatory permit, card or certificate to continue to perform your work duties
• sunscreen, sunhats and sunglasses where your duties require you to spend prolonged periods outdoors
• phone and internet costs, with records showing your work-related use
• overtime meal expenses that you buy when you work overtime, if your employer paid you an overtime meal allowance under an industrial law, award or agreement for the overtime and it’s included in your assessable income.

If you require more information, please contact our office on (03)9848 5933 or go to the fact sheet.

Source: www.ato.gov.au