An apprenticeship is a great way for young people to learn new skills and earn money while gaining valuable experience in a field that interests them. But there are many things to consider before you start working as an apprentice. This article will help you figure out how much you can claim.
An apprentice can claim tax expenses incurred while training or learning new skills.
If you work as an apprentice, you can claim expenses related to training or learning new skills, such as books, courses, travel, and equipment. These expenses must be directly connected with the job you do as an apprentice.
You can claim travel expenses related to work-related activities.
As an apprentice, you can also claim tax related expenses for attending conferences, seminars, and other events where you learn new skills. This includes any costs associated with traveling to these events, such as accommodation, food, and transport.
Before we begin, I am a registered tax agent with the Tax Practitioners Board. I am a trade-qualified Cabinetmaker with 20 years of experience.
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.
Motor Vehicle:
This is your biggest deduction so please read carefully.
The ATO targets this claim first as it can add the most to your tax refund. It is also the easiest deduction 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 their 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, the date of the travel, and the 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 moved 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.
Successful recordkeeping will open up the claims for:
Depreciation - The value of your vehicle drops, this drop is then claimed as a tax deduction in your tax return
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 a maximum of 5000 km might be your best option.
Traveling Costs:
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's view is that 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, and sunscreen.
If you wear industry-specific clothing then you can look to claim washing as well.
Education:
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, and Travel to and from training. If your employer pays this then it is their claim, not yours. If you have claimed Cents Per Kilometer in your work-related please be aware that the limit is 5000 km in total.
Other expenses:
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 looking for a good tax accountant with a trade background 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, email, and face-to-face appointments for tax returns so it doesn't matter where your career takes you.