100 Business Tax Deductions
One of the most common questions first time business owners have is: “What can I claim as a tax deduction”. This is the legal definition as written in the Income Tax Assessment Act 1997 s8.1:
(1) You can deduct from your assessable income any loss or outgoing to the extent that:
(a) it is incurred in gaining or producing your assessable income; or
(b) it is necessarily incurred in carrying on a * business for the purpose of gaining or producing your assessable income.
The Act then goes on further to describe what you can’t deduct:
(2) However, you cannot deduct a loss or outgoing under this section to the extent that:
(a) it is a loss or outgoing of capital, or of a capital nature; or
(b) it is a loss or outgoing of a private or domestic nature; or
(c) it is incurred in relation to gaining or producing your * exempt income or your * non - assessable non - exempt income; or
(d) a provision of this Act prevents you from deducting it.
So, what does this mean in “normal” English? First, the expenses must relate to you earning your income, and it must have occurred while carrying on a business. You can’t claim things that are private or domestic in nature. And anything that is related to capital expenditure is treated differently (depreciated).
What I like to say to people to simplify this is:
“would you have spent this money if you weren’t running a business”.
Generally speaking, the money you spend in the day to day running of your business is tax deductible, but there are some areas of spending that special rules apply to like building fit outs, home office expenses, entertainment and asset's. These have been excluded from the list. With that in mind the most important thing to remember is to retain your receipts and invoices!!!
100 Business Tax Deductions
Accounting fees
Amortization
ASIC annual fees
Apps
Art**
Bad debts (if you use the accrual method)
Bank fees
Bookkeeping
Branding
Business cards
Business name renewal
Business Travel (make sure you keep a travel diary)
Canva
Car wash (when using the logbook method)
Cleaning*
Cloud based storage fees
Co working space
Coffee machine*
Commercial rent
Commission
Contractors
Customer Discounts
Cyber Security
Debt collection expenses
Depreciation
Domain fees
Donations (must be on the ACNC)
Electricity
Embroidery on uniforms
Equipment hire
Fire extinguisher*
First aid kit*
Franchise Fees
Graphic design
Hand Soap*
Insurance (Liability, PI)
Interest expense
Internet
Inventory**
Investment Advice**
IT Support
Kitchen equipment in staff room*
Land tax*
Landscaping*
Market stall fees
Meals while on business travel
Merchant fees
Meta ads
Mobile phone
Mobile phone screen repairs
Moving expenses (between commercial premises)
Music licensing fees
Non entertainment gifts
Organisation solutions (plastic shelf organisers)
Parking
PayPal fees
Payroll Processing
Payroll tax
Permits
Pest Control*
Photography
Planners & Diaries
Postage/ freight/ couriers
Prescription safety glasses
Printer consumables
Prizes
Professional development
Professional memberships
R&D
Rates
Raw materials
Recruitment fees
Repairs and maintenance
Safety equipment
Security expenses*
Signage/ Sign Writing
Social media management
Staff room consumables*
Stationery
Storage Rental
Strata fees*
Subscriptions
Sunscreen
Superannuation (must be paid on time)
Text books
Toilet paper*
Trade Magazines
Trade Shows
Transcribing Services
Uniforms
Virtual Assistant
Vehicle expenses (logbook method)
Videography
Wages
Waste Removal
Water Cooler*
Web development fees
Website hosting
Workers comp insurance
Xero
*Expenses relate to a commercial premises and not a home office
**Claimable but there are specific rules
To find out more about what you can claim as a business owner you should always seek professional advice before you commit to any large expenditure or if you are unsure if a specific deduction applies to you.
I’d love to hear if you’ve found something on the list you didn’t know you could claim!
