Which Trades Enjoy Significant Tax Benefits?
Governments collect funds and implement development programs in various countries through taxes. Every country has policies on how it taxes its citizens.
The annual Revenue Statistics indicate that the ratio of tax to GDP of almost all countries has been increasing. This follows a decline that occurred in the years 2008 and 2009.
This decline was attributed to an economic crisis that most countries worldwide faced at that time. Paying taxes is an essential activity that every citizen is obligated to do.
Most countries depend majorly on taxes to run and carry out their operations. In the European Union, tax revenue is about 40.3% of the GDP in the EU. This amount, collected from tax, accounts for around 89.4% of the total revenue of the governments in the EU.
This shows how collection of taxes is essential in every country. However, there are times when governments show leniency to people of specific groups when it comes to paying taxes.
Some trades also enjoy tax relief, or a reduction in the percentage of taxes paid. The following are some trades that enjoy significant tax benefits:
- Welding and fabrication
- Mechanical works
- Landscaping business
5 Trades You Can Join to Enjoy Great Tax Benefits
Welding and fabrication
Welders can claim various tax deductions, and these depend on whether they’re self-employed or hired to work for someone else.
Welders who do jobs for their employers and at the same time do side projects have the advantage that the side jobs are categorized as self-employment income.
Therefore, they’re allowed to make more deductions on their tax returns. Some of the tax deductions for welders cover the following:
- Trade and union association fees
- Liability insurance cost
- Safety gear
- Tools that can be replaced within one year.
Safety gear are important when doing welding works. They protect your body from likely burns and injuries. For instance, welding gloves built with Heat Resistant properties ensure that your hands aren’t exposed to heat and spikes that can easily cause burns.
Due to the essence of safety gear, they often enjoy tax relief. This ensures that you can easily access a pair of gloves and other safety gear without breaking the bank.
A self-employed welder can also claim deductions on any of the following:
- Marketing and advertising
- Maintenance fees
- Equipment costs
- Vehicle costs
- Expenses used in maintaining the vehicles.
Mechanical business is a trade concerned with the production, installation, and maintenance of pieces of machinery. The tax deductions for mechanics fall under the following categories:
- Cost of buying meals and travel
- Work-related training fees
- The cost of buying and maintaining equipment and tools.
Mechanics enjoy more deductions on tax paid, apart from the ones mentioned above. With the tax benefits, you, as a trader, can claim higher tax returns.
Plumbing deals with installation and servicing of water and sewerage pipes. Plumbers also install appliances and pipes that are used for other liquids.
The money that plumbers are paid is taxable, whether they provide services inside or outside their regular job. For services offered outside the job, plumbers pay self-employment tax.
However, plumbers are advantaged because they can reduce the taxes they’re charged if they deduct unreimbursed expenses related to their job.
Some of the items they can deduct from tax paid, just like welders, include:
- Safety equipment such as boots
- Trade union dues
- Specialized equipment that can be replaced within a year.
Landscapers are involved in several tasks. It’s a busy occupation, meaning you can easily fail to follow up on tax deductions you should claim. Landscaping business enjoys the following tax deductions:
- Car expenses
- Advertising costs
- Contract labor
- Depreciation expense
- Maintenance and repair of machinery
- Professional services and wages.
Carpentry business deals with woods and related products. If you’re focused on getting the most out of your returns, you need to be keen. Some tax deductions that carpenters enjoy include:
- Union dues
- Work uniforms
- Insurance premiums
- Safety equipment and costs for a trade publication
- Tools that can be replaced within one year.
Tax reliefs can benefit various trades. They minimize the cost that you, as a businessperson, would incur, should the right tax percentage be charged. Most traders are often too busy to track these tax deductions.
If you’re held up, and can’t find time, it’s recommended that you employ a tax professional who can track the deductions on your behalf. However, this is only possible if you can afford to pay the tax pro on a regular basis to offer the services.
The trades discussed in this articles are just some of the many self-employment businesses that enjoy significant tax benefits. You can start a business in any of the trades to enjoy the tax benefits and earn more profits.