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What can tradies claim on their tax returns?

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1Tradies can claim deductions for expenses that directly relate to their work as an employee, including car, travel, tools and equipment, clothing, self-education and other work-related expenses.

To claim a work-related expense you must have spent the money yourself and not have been reimbursed, it must be directly related to earning your income, you must have proof and you can only claim the work-related part of an expense, meaning you can’t claim a deduction for any part of the expense that related to personal use.

The expense must also have been incurred in the year you are claiming the deduction unless the claim relates to the depreciation of tools or equipment you purchases. If you are claiming the decline in value of tools or equipment they must have been used or been available for use in the year you make the claim.

Car expenses 2

You may be able to claim car expenses when you are:

  • Driving between separate jobs on the same day
  • Driving to and from an alternate workplace for the same employer on the same day
  • Transporting bulky (around 20kg) equipment provided your employer required you to transport the equipment to work, it was essential to earning your income, there was no secure area to store the equipment and it was cumbersome to transport

To claim these deductions you must keep a record of your expenses using a logbook or be able to demonstrate a reasonable calculation using the cents per kg method.

3Travel expenses

You may be able to claim travel expenses if:

  • You are required to travel overnight from your usual work location
  • The cost was incurred while carrying out your work duties
  • Your employer requires you to travel to a worksite for a short period to perform work and it would be unreasonable to expect you to return home each day

Tool and equipment expenses6

You may be able to claim tool and equipment expenses if:

  • You are required to purchase tools and equipment for your work
  • It cost $300 or less
  • You incurred work-related costs associated with insuring or repairing the tools or equipment

For tools or equipment worth more than $300 you can claim a deduction for this cost spread over a number of years (depreciation).

Clothing expenses

You may be able to claim clothing expenses for buying, hiring, mending or cleaning clothing that:4

  • Is unique and distinctive to your job (uniforms)
  • Protective clothing that your employer requires you to wear

You can’t claim a deduction for plain clothing worn at work every day even if your employer tells you to wear it e.g. standard jeans, drill shirts.

Self-education expenses

You may be able to claim self-education expenses if the course/s was undertaken at an education institution and: 5

  • You attended a work-related conference, seminar or education workshop
  • You are upgrading your qualifications for your current employment
  • You are improving specific knowledge or skills used in your current employment
  • You are employed as a trainee and undertaking a course that forms part of that traineeshio
  • You can show at the time you were working and studying your lead, or was likely to lead, to an increase in employment income

If your employer pays for the course/s or reimburses you then you can’t claim a deduction.

Other work-related expenses

Other expenses you may be able to claim if they relate to your employment are:

  • Protective equipment, including sunglasses, sun hats and sunscreen
  • Safety equipment, including harnesses, goggles and breathing masks

To find out what deductions you can and can’t claim take the ATO myDeductions quiz here.

About Adelle King

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