You can generally claim a tax deduction for most expenses you incur, as long as:
-
the expense relates directly to earning your business’s assessable income
-
you only claim the business-use portion of an expense that’s for a mix of business and private use
-
you have records to substantiate your claims.
You can claim deductions for:
-
day-to-day operating expenses, such as office stationery and wages, in the year you have to pay (or have paid) for them
-
capital expenses, such as machinery and equipment, which are typically of long-term benefit. They can be depreciated over the term of the asset’s life. Alternatively, you may be able to claim an immediate deduction through temporary full expensing.
Business expenses may include motor vehicle, travel, legal, digital product and home-based business expenses, and items related to protecting staff from COVID-19 at work such as hand sanitiser and sneeze or cough guards.
You can claim deductions for super contributions. You can also claim deductions for payments you make to workers (including their wages) as long as you’ve complied with the pay as you go withholding and reporting obligations for each payment.
Keep in mind there are some expenses you can’t claim, such as entertainment or private expenses, traffic fines, and expenses that relate to earning non-assessable income.
Remember, registered tax agents can help you with your tax. Call us on 0417 606 279 if you need assistance.
It’s a good idea to keep complete records of expenses throughout the tax year (instead of a representative period) to give you more flexibility.
If you’re a sole trader, you can also use the myDeductions tool in the ATO app to keep records of your business expenses.
Source: ato.gov.au August 2022
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/Newsroom/smallbusiness/General/Do-you-know-what-business-expenses-you-can-claim-/.
Important:
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.
