The Tax Office has builders, their employees and subbies in their sights again this year, but there are still some legitimate ways to maximise your tax refund without attracting undue attention from the ATO.
Our top tax tips for building industry workers are:
1. Maximise your car claims – normally travel from home to work is not tax deductible, but if you need to carry heavy or bulky tools to and from work each day (and there is nowhere at work for you to securely store them overnight) then you could be claiming for all of these trips on your tax return.
Make sure you keep a log book so you can prove which trips are work related and also keep receipts for all car running costs (including fuel, repairs, tyres, lease payments, insurance and registration) to maximise your claim.
2. Claim the Entrepreneur’s Tax Offset – small builders and subcontractors may be able to reduce their tax bill by up to 25% by claiming this offset on their tax returns. To get the maximum reduction you need to have total sales of $50,000 or less for the year. The offset cuts out altogether once your sales exceed $75,000. This can mean a saving of more than $2,000 in tax per year.
3. No receipts needed for items costing less than $10 – it’s sometimes difficult to get (or keep) receipts for all of your minor purchases during the year. Rather than worrying about them, just keep a diary with the information that would normally be shown on a receipt (date, business name, item purchased, price). You can claim up to $200 a year for these small expenses, without keeping any receipts.
4. Claim for using your family car for work – if you have a second car that you occassionaly use for work, you could be claiming for it on your tax return. The simplest way to claim is estimate the number of kilometres you travel for work purposes during the year (up to a maximum of 5,000km per vehicle). Trips could relate to preparing quotes, attending meetings or training courses, travelling to pick up supplies, equipment or tools, or travelling between job sites or office locations.
You will need to be able to show the Tax Office how you have calculated the number of kilometres you claim for, but you don’t need to keep any receipts for petrol, car repairs or other running costs for the family car.
5. Meal and travel expenses – when you are required to stay away from home (for example, to work on a particular job site or to attend a training course or TAFE block release) you can claim for all of your meals, accommodation and incidental expenses. To maximise your deductions, you should keep receipts for everything you pay for while staying away. This includes all food and drinks (apart from alcoholic drinks), accommodation or board, train/bus fares, parking and tolls.
For more information about any of these tips contact Personal Tax Specialists Pty Ltd.
Tracey Collins, for the Personal Tax Specialists team
Offers personal tax returns for investors and people working in professional occupations
Specialises in these occupations: travel consultants, nurses, teachers, building industry, sales representatives, Defence force, journalists, airline industry, chefs, emergency services, real estate, security guards, rental property owners and share investors
Established in 2009 by tax professionals Tracey Collins and Christine Snelson