Tax tips for tradies
As a tradie, knowing what you can claim at tax time can help you make real savings. With all the different write-offs and expenses available, we’ve put together this guide to help our customers this end-of-finanicial-year. It is important to note that this advice is general and it is crucial to seek advice from your financial or tax adviser to check what tax deductions may be applicable for you and your business.
What can you claim
There are costs incurred in relation to running a trade business that can be claimed, including eligible assets. Operating expenses may also be tax deductable: this includes items such as drop sheets, masking tape and gaffer tape.
So, what else can you claim this EOFY, and how can you go about organising your expenses? Here are five tips to make tax time easier for trade professionals in 2022.
Take advantage of temporary deductions
There are extra tax depreciation incentives available to businesses as Australia recovers from the pandemic, including "temporary full expensing" and the "instant asset write off". Temporary full expensing enables trade businesses to claim an immediate deduction for the business portion of the cost of assets such as tools and equipment (think sprayers, pressure washers and sanders). Improvements made to existing assets may also be claimed. If your asset does not qualify for temporary full expensing, it will likely still apply for the instant asset write-off.
Buy before June 30
If there are assets your business needs, buying them before June 30 will allow you to claim them in your 2021-22 tax return. Assets that qualify for an immediate deduction include:
sanders
sprayers
ladders
nail guns
shelving
storage
If you’ve been planning to upgrade items like these, now is the ideal time. A great range of sprayers, pressure washers, ladders, sanders and more are currently on sale at your local Dulux Trade or Paint Spot (Victoria only) store, with up to 30% off some items. Check out our EOFY catalogue, then head to in store with your trade account number and stock up today.
Don’t forget technology
As well as tools and equipment, most trade businesses rely on technology to operate. The cost of assets such as desktop computers, laptops, tablets, mobile phones and so on can be claimed as well as internet costs. Don’t forget, you can only claim the portion of the cost that relates to your business. So, if you use your laptop to run your business from Monday to Friday and for personal reasons on weekends, you’ll need to factor this split into your claim.
Start organising receipts
Record keeping is so important for trade professionals. When claiming any tax deduction, you must have a receipt that clearly shows how you’ve calculated your claims. Receipts (or similar written evidence of a claim) should show the:
name of the supplier
total expense
nature of goods or services
date of expense paid
date of the document
Whether you use an accountant or submit your tax return yourself, now is the time to gather up all your receipts, ready for sorting and claiming. Remember, bank or credit card statements usually won’t have the relevant information needed to support a claim.
Claim COVID-19 expenses
This year you may be able to claim temporary work from home expenses and other expenses related to COVID-19. The simplest method is the temporary shortcut method, introduced by the Australian Tax Office in response to the pandemic. This shortcut is for solo and SME tradies and other businesses because it only requires you to keep a record of when you worked from home in a calendar or timesheet. Using this method, you can claim a deduction of 80 cents for each hour you worked from home. The shortcut is only available until 30 June 2022.
Some pandemic-related expenses such as COVID-19 tests are also claimable. For example, COVID-19 tests your business used to determine if staff could attend or remain at work. Find out more about which tests are eligible and whether you can claim a deduction.
After the rollercoaster of the past few years, it’s important to protect your business now more than ever. With these top tax tips in mind, you can set yourself up for success this EOFY and maximise deductions for your painting or multi-trade business.
Disclaimer
Dulux does not provide tax or financial advice. Please seek advice from your financial or tax adviser to check what tax deductions may be applicable for you and your business. Dulux excludes all liability for any loss, costs, damages or expenses incurred as a result of any person or business relying on any statements made by Dulux in relation to tax or financial benefits or deductions that may apply.