Tax deductions are the mechanics of your tax return. They will make sure your tax return is running efficiently and smoothly! Here are some tax deductible expenses for mechanics. Don’t leave anything out of your online tax return. If you save every little bit, and deduct everything you’re entitled to, the tax return can be massive.
When it comes down to it, there are three main criteria that qualifies an expense for tax deduction, which is calculated against your income:
- You must have spent the money and not have been reimbursed
- It must be related to your job
- You must have a record to prove it
However, this in itself can be hard to understand. What constitutes an expense as “related” to your job? Here is what defines your taxable income, and a list of expenses that you as a mechanic in Australia can deduct on your next online tax return.
Remember, a record isn’t necessarily a receipt. There are tax deductions you can claim without a receipt. Continue on to find out more.
What Is Your Taxable Income
Your taxable income is money generated from your employer or your work. Your taxable income also includes:
- PAYG summaries
- Pensions and government allowances
- Interest earned (banks etc)
- Dividends
- Rental property income
- Business income
- Other income earned (capital gains etc)
Tax Deductible Expenses For Mechanics
Mechanic Specific
1. Clothing
- Uniforms that have employer logo
- Overalls and heavy-duty pants
- Protective clothing items that mechanics use (hi vis, steel cap boots, gloves, goggles, sun protection etc)
- The cost to launder mechanic work protective clothes / uniforms
2. Tools & Equipment
- Purchase of hand tools (hammers, screwdrivers, wrenches, socket sets etc)
- Purchase of power tools (drills, grinders, impact guns, welders etc)
- Diagnostic equipment and laptops
- lubricants,
You can claim each item that is less than $300. If over $300 you’ll need to depreciate the cost.
The repair and/or upkeep of your tools and equipment
If you’ve taken out a loan to purchase your tools and equipment, you can claim the interest charged on the loan.
3. Personal motor vehicle expenses
- Cents per kilometre up to 5,000kms
- Log book method if business use is high
Kilometres can you claim:
- Driving to reach a customer
- Picking up parts from suppliers
- Purchasing tools and equipment
- Driving between two places of work
- If you have shifting places of employment (no fixed workplace) travel from job to job
Kilometres you cannot claim:
- Driving to and from the same location every day
If you have a >1 tonne ute you can depreciate the cost and claim all expenses if it is required for your work.
4. Self-education and courses for work
- Tafe if you’re working as a mechanic
- Upskilling courses
- Manufacturer training
- First aid or fire safety training
You can also claim the cost of travelling to and from the course from work as cents per kilometre.
5. Other tax deductions
- Licenses and registrations (including heavy duty drivers license)
- Fees from joining a union/other similar organisations
- Journals, publications and subscriptions
- Mobile phone where required for work
Mechanics Tools and Items
This expense will most likely be your biggest area for tax deduction. It is very important that you closely record what your expenses are, and keep the receipts/proof of purchase.
Mechanic Protective Clothing
Don’t try to skip out on safety in your garage. Just remember, the things that you spend on safety as a mechanic can be claimed back as a tax deduction.
Mechanic Tool Depreciation and Write Offs
Any tools you may be using valued over $300, such as a car hoist, are susceptible to depreciation expense. Say your hoist depreciates, or it extends its usable life and has to be written off, you can claim this as a tax deductible expense.
Self Education Courses and Licenses
Any self-improvement courses or licenses to keep you operating as a mechanic can be claimed back as tax. Make sure you are recording what you have paid and done.
General
- Car expenses and general wear if your car use is work related (estimated Km or a logbook with all expense items)
- Travel expenses for your work (flights, taxis and trains etc)
- Accommodation needed on work reasons (including meals)
- Phone bills for work
- Work related computing
- Working from home costs
- Self-education
- Tax return fees dating to the year previous
- Insurances
- Rental expense (if you are renting)
- Charity donations and gifts
- Sun protection (if you have to work outside)
Maximising Your Tax Return With An Online Tax Agent
There will be more tax deductions for mechanics that aren’t on this list. Tax deductions are not only industry specific, but also change from individual to individual.
The best way to claim the most you can is with a tax agent like One Click Life. We have made the process simple with 5 easy steps.
The more you deduct, the less tax you pay and the more money you can spend on yourself. Clearly, you will want to deduct the most you can. The sure-fire way to do that is with a tax agent or accountant. If you can claim your tax agent/tax return fee back on tax, why wouldn’t you use one to minimise your tax?
One Click Life fast offers online tax returns at your fingertips in an easy-to-use platform run by industry professionals.
Taxes, health insurance, and wills can be time-consuming and tedious. Our app allows you to be able to do this fuss-free, giving you a simple way to organise, track and manage all of your life admin in one place.
Let One Click Life take care of your tax return and life’s essential tasks, so you can spend more time doing the things you love.