Tax deductions for small business owners

Tax time is fast approaching—it’s important to do your homework and know exactly what tax deductions you can claim.

What can a business claim as a deduction on your tax return?

You can claim a deduction for most expenses you incur to run your business, as long as they directly relate to how you earn assessable income.

Travel

If you or your employees travel for work, you can claim deductions on transport such as airfares, train, bus or taxi fares.

For overnight travel, the rule for claiming expenses is:

• one night or more – keep written evidence of all expenses
• six or more consecutive nights – keep a travel diary recording all the particulars of the business activities you undertake.

Check out the Australian Taxation Office (ATO) Business travel expenses information.

Motor vehicle expenses

Do you have a car you only use for business?

Claiming expenses and how you calculate them will depend on:

• your business structure (i.e. sole trader, company, partnership or trust)
• the type of vehicle
• how the vehicle is used.

Go to the ATO’s Motor vehicle expenses page to learn more.

Repairs and maintenance

You can claim a deduction for repairs and maintenance on your business assets, including:

• painting
• conditioning gutters
• plumbing maintenance
• repairing electrical appliances
• repairing machinery.

For more information visit the ATO’s Repairs, maintenance and replacement expenses page.

Running your business from home

If you run a home-based business, or have a home office where you work from home, you may be able to claim:

• occupancy expenses – such as mortgage interest or rent, council rates, land taxes, house insurance premiums
• running expenses – such as gas and electricity, phone, decline in value of plant and equipment, decline in value and cost of repairs to furniture and furnishings, cleaning.

Use the ATO’s Home office expenses calculator page to help you work out the amount you can claim as a tax deduction for home office expenses.

General operating expenses

Operating expenses are the costs you incur in the everyday running of your business, such as:

• stationery
• salaries
• internet
• insurance.

You can generally claim a deduction for most operating expenses.

Check out the ATO’s Other operating expenses page for a full list you can claim information.

More information

• If you’re a sole trader, check out the ATO’s mydeductions app to record your expenses during the year.
• Need help setting up a record keeping system? Check out Record keeping for small business owners guide.