What can an apprentice claim on tax?
I get asked this question during tax appointments from apprentices.
So what can an apprentice claim on tax?
It depends on your employment and the duties your employer sets for you.
Below I will go through some of the most common deductions available to apprentices in order of value back in your tax return.
Before we begin I am a registered tax agent and before this I was a cabinetmaker for 15 years.
I did my apprenticeship with multiple employers and the experience I learned still applies today. By getting the basics right you can get your taxed money back into your pocket.
This is your biggest deduction so please read carefully.
The ATO attack this claim first as it is the easiest to remove during an audit.
Most apprentices will be required to travel to different sites and/or carry tools to and from work.
To claim your motor vehicle you will need to complete a few things to get this through safely.
First you will need a letter from your employer on the business letterhead stating that you are required to use your vehicle for work. (N.B: Get this now! The ATO will ask your employer for this) If you have multiple employers please get one from each. For apprentices that are hosted out to an employer (e.g Apprenticeships Queensland) then each host will need to confirm the use of your motor vehicle.
Next you will need to complete a motor vehicle logbook. 3 months with all kilometers on the odometer recorded, date of the travel, reason for the travel. Any mistakes will make the logbook invalid. All personal travel needs to be logged also.
If you change employer then you will need to start another logbook.
If you have worked on one site for the 3 months and move to another site then you will need another logbook.
DO NOT FUDGE THE FIGURES! - Google maps are used to verify the distances!
A great rule of thumb is to continually log your kilometers in the vehicle.
If you work in a factory or on a site that has secure lockable storage the claim will be lost.
From here this will open up the claims for:
Depreciation - The value of your vehicle drops, this drop is then claimed as a tax deduction
Fuel and Oil - Keep all your receipts as bank statements don't count.
Registration and insurance
Repairs and maintenance - Not the huge muddies or the snorkel and 2.5 inch lift. Only expenses that can relate to your employment.
RACQ - this is an expense that can be claimed.
As you can see the motor vehicle is your best claim if you follow the guidelines and starting this early in your career will get you maximum deductions and bragging rights at work while being compliant with tax laws.
If that is too much then settling for the maximum 5000km's might be your best option.
Tolls - If you drive through tolls you will need to justify them, please take out the personal trips before adding them in.
Parking - This is common for inner city construction though has come under scrutiny as the ATO can see you travel to a parking lot and then walk your tools to work. Please refer to lockable storage as well.
Uniforms: All PPE that you buy is tax deductible such as Steel cap boots, eye and ear protection, Hats, Sunglasses, sunscreen.
If you wear industry specific clothing then you can look to claim washing as well.
As an apprentice you are required to undertake training. This can be at TAFE or with another provider. Claims that can be made are TAFE Fees, Books, Travel to and from training. If your employer pays this then it is their claim, not yours.
Tools - You will be buying a lot of these over the 4 years so keep the receipt
Phone - If you are required to have a phone then you can claim a portion of your phone bill
There are a lot of deductions available to apprentices and it pays to start setting some good habits now.
If you are an apprentice and you would like to know 'what can an apprentice claim on tax' then please get in contact with me.
I offer discounts on apprentices tax returns. The fees are fixed and all deductions can be added to the return. I have no hidden costs
I offer Zoom, phone and email appointments for tax returns so it doesn't matter where your career takes you.