Is your trade business eligible for the instant asset write-off? Do you know the other tax deductions that your trade business can claim to reduce its taxable income?
To claim tax deductions, your trade business must produce invoices or receipts to prove that these purchases are directly related to the business. After all the hard work though, many business owners can neglect this part of the business that’s why it’s important to use an outsourced finance department or professional bookkeeper.
Tradies can claim several expenses to save lots of money. Because of the pandemic, the Government introduced an immediate write-off for assets worth up to $150,000. If you are a trade business owner, it could be a good incentive as it includes business vehicles. The instant asset write-off will apply for vehicles over 1 tonne or those used to carry work equipment. Speak to your tradies accountant to make sure you are eligible for the tax deduction. Keep all documentation for compliance. This is a good way to reduce your taxable profit.
Trade business tax
Other items for tax deductions for your trade business are replacement tools. You can claim expenses you incur from insuring or repairing your tools and equipment and claim interest charged on borrowed money to buy the items. However, if the tools or equipment are used for personal and work use, you would need a diary that shows how they are used so the tax deduction can be correctly apportioned. These equipment may be eligible for an instant asset write-off especially if you own a factory and want to buy expensive equipment.
Safety is important in the trade industry so protective equipment and clothing like sunglasses, hard hats and steel boots can be claimed as a tax deduction. Simply show proof of purchase. You can also claim costs you incur from professional development courses that can help you scale. These licenses, certifications and courses enable you to improve your skills and stay competitive so these are tax deductible.
Last but not the least, you can claim extra superannuation contributions you make against your business profit as well. Superannuation funds have lower tax bracket so your overall tax may be lowered if you make extra contributions into your fund. Talk to a financial planner and accountant to check if the strategy is relevant to your trade business.
Ensure your trade business is eligible for the instant asset write-off and other tax deductibles. Consult a tradies accountant and request for a consultation.
As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.
You can click here to speak to a business, accounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.
We would love to help you formulate investment strategies and streamline your processes to take your business to the next level. Our goal is to help you grow your business, find ways to invest more and increase your productivity.
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Gisborne & Macedon Ranges
Phone: 03 97444522
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437