Construction Worker Tax Deduction Checklist
It's tempting to bury your head in the sand when it comes to tax time. Who wants to spend hours going through old receipts? But the truth is that putting together a really comprehensive tax return each year could mean a LOT more money in your pocket at the end of the day. Surely that's worth the effort?
The good news is that you don't have to do it alone. Our expert tax consultants at H&R Block are here to help you, and they know all the different deductions workers in the building and construction sector could be entitled to. So they can make sure you don't miss out on a single dollar!
What's the process? As a building and construction employee, you'll receive an income statement from your employer that will outline all of your salary, wages, allowances and bonuses for the financial year. Next, you have to work out your deductions.
Can I claim any deductions?
You can claim deductions on any money spent during the financial year on products or services that directly related to earning your income. You need to have spent the money yourself (it can't have been reimbursed by your employer) and you need to keep a record of the expense such as a receipt or invoice.
What deductions can I claim?
There is a wide range of deductions you can claim as a construction worker, such as:
- Car or truck expenses when you're driving to and from work, but only if you're required to transport heavy, bulky tools or equipment (such as a ladder or power tools) back and forth because there's nowhere secure to leave them at your work site
- Any transport expenses if you are driving between multiple job or work locations during the day
- The cost of insuring any personal tools or equipment to the extent that you use them for your work (which means if you also use the items outside of work then you can only claim a partial deduction)
- The cost of renewing licences, regulatory permits, certificates, or 'cards' needed for your work
- The cost of buying, repairing and cleaning any clothing items (including footwear) that are protective (such as steel capped boots or heavy duty overalls) or are officially a uniform and have distinctive features such as your employer's logo on them
- Any expenses related to buying protective items such as a hard hat, gloves, safety glasses or goggles, helmets or breathing masks as well as (if you work outside) sunglasses or anti-glare glasses, sunhats and sunscreen
- Self-education costs for attending any courses, training or seminars specifically related to your current line of work (such as first aid certification or renewal)
- Phone and internet expenses for any work-related usage on your personal phone or device, provided they are not already covered by your employer
What can't I claim?
There are several key expenses you can't claim, including:
- Regular clothing of any kind, such as jeans, shorts, running shs or plain t-shirts, that can be worn outside of your workplace, even if you only ever wear these items when you're at work
- The cost of renewing your driver's licence, even if having it is a condition of your employment
- You also can't claim any parking fees, fines for speeding or parking, or road tolls that are incurred during your work day
- Any tools or equipment provided to you by your employer
- The cost of any meals or snacks consumed during the course of a normal work day, even if you are given an allowance by your employer to cover the meal expense
What records do I need to keep?
Staying on top of your receipts and having impeccable records is very important if you want to get a good tax refund. So it's a smart idea to create an easy and reliable system to help you keep on top of this throughout the year.
Remember, you don't need to keep physical receipts, and it's acceptable to keep a digital copy (such as a photo of a receipt or an email receipt) provided it is possible to read:
- The name of the supplier
- Amount of the expense
- Nature of the goods or services
- Date the expense was paid
- Date of the document
You also don't need to keep receipts for expenses under $10 (as long as these don't cumulatively come to more than $200).
What happens if I make a mistake in my tax return?
It can happen to anyone, and dealing with it as soon as possible is always the best approach. It's essential that you take great care in putting together the information and supporting documentation when filing your tax return, and only claim deductions that are genuine to avoid penalties and possibly even prosecution from the ATO.
But we all make accidental mistakes sometimes. If you've self-lodged and realise you've submitted incorrect or unsubstantiated claims then you should contact us immediately and we will assist you in making the necessary amendments.
Still have some questions about lodging your tax return? Talk to H&R Block. Our experienced tax consultants will be able to help. Call 13 23 25 for details or find your nearest office and book an appointment online.
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