Not everyone looks forward to tax time. In fact, this time of year can add a lot of stress to busy tradie lives, but it doesn’t have to be this way. We’ve assembled five handy tips that will make your tax season a breeze this financial year.
1. Keep your books in order
Much of the stress of tax time comes down to poor planning. Rather than having to go through a shoebox full of receipts the night before your tax return is due, put aside a small amount of time each week to keep your books up to date throughout the year. Easy-to-use accounting software for tradies and construction industry businesses makes this process simple – you can even link it to your bank account to automatically record your expenses.
2. Track your mileage
The same goes for tracking your mileage. If you make the effort to record your travel kilometres as you go, you’ll avoid undue stress towards the end. Fortunately, you can rely on technology here, too. QuickBooks and other tracking enabled apps automatically record your mileage as you drive. They also let you easily separate personal from business trips and create accurate custom reports, which will save you chunks of time come June.
3. Know your deductions
Assets that cost less than $20,000 are generally fully deductible from your taxable income. However, assets that cost more than that usually need to be deducted over time. As a tradie, you can generally claim work-related tools and protective clothing, along with other expenses that are required to generate your income. You might also be eligible to claim car mileage if you transport bulky equipment (min. 20kg) to and from work sites.
4. Don’t forget your tech
Tradies can also claim any technological tools such as mobile phones, tablets, and laptops you use for work-related purposes. That includes the cost of the device and any call or internet costs. But, just like all your other expenses, phone and internet bills need to be retained and recorded in your accounting software.
5. Consult a professional
It’s always a good idea to see a professional accountant. They can help ensure employees don’t miss any deductions or claim ineligible items. Tax accountants are a valuable resource for trade business owners who may need to deal with more complicated tax issues such as fringe benefits tax (FBT), PAYG, and employee superannuation contributions.