{"id":280640,"date":"2024-07-10T13:26:27","date_gmt":"2024-07-10T01:26:27","guid":{"rendered":"https:\/\/www.reckon.com\/au\/?post_type=sbh&p=280640"},"modified":"2026-04-15T18:30:11","modified_gmt":"2026-04-15T06:30:11","slug":"tax-deduction-for-small-business","status":"publish","type":"sbh","link":"https:\/\/www.reckon.com\/au\/small-business-resources\/end-of-financial-year\/tax-deduction-for-small-business\/","title":{"rendered":"Tax deduction for small businesses"},"content":{"rendered":"

[et_pb_section fb_built=”1″ custom_padding_last_edited=”on|phone” _builder_version=”4.23″ custom_padding_tablet=”” custom_padding_phone=”0px||||false|false” da_disable_devices=”off|off|off” locked=”off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_3,2_3″ _builder_version=”4.23″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” custom_padding=”||0px||false|false” global_colors_info=”{}”][et_pb_column type=”1_3″ module_class=”table-contents” _builder_version=”4.23″ background_color=”#f3f2f6″ custom_padding=”25px||25px||true|false” sticky_position=”top” sticky_limit_bottom=”section” sticky_position_tablet=”top” sticky_position_phone=”none” sticky_position_last_edited=”on|desktop” border_radii=”on|24px|24px|24px|24px” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.23″ text_font=”||||||||” global_colors_info=”{}” background__hover_enabled=”on|desktop”][\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Copy paste body text here” _builder_version=”4.27.6″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” locked=”off” global_colors_info=”{}”]<\/p>\n

A tax deduction is a business expense you subtract from your assessable income to reduce the amount of tax you pay.<\/p>\n

Managing business expenses is crucial for maintaining cash flow, complying with tax regulations, and ensuring long-term profitability.<\/p>\n

Claim tax deductions correctly, and you lower your taxable income, keeping more money in your business. Here is what you need to know.<\/p>\n

What is a tax deduction?<\/h2>\n

A tax deduction lowers your taxable income. In short, assessable income minus deductions equals taxable income. The more legitimate business expenses you claim, the less tax you pay overall.<\/p>\n

You claim tax deductions<\/a> in your tax return every financial year. A sole trader claims in their individual return. Companies, partnerships and trusts lodge separate returns.<\/p>\n

What tax deductions do you qualify for?<\/h2>\n

You can claim a deduction for most expenses directly related to earning your business income.<\/p>\n

The ATO has three golden rules<\/a> for valid business tax deductions:<\/p>\n

    \n
  1. The expense must be for business purposes.<\/li>\n
  2. It must not be for private or personal use.<\/li>\n
  3. You have to have the records to prove it.<\/li>\n<\/ol>\n

    If an asset or cost is split between business and private use, you can only claim the business-related portion. If, for example, your motor vehicle has 60% business use and 40% personal, you claim 60%.<\/p>\n

    You need to keep complete and accurate records for at least 5 years to substantiate your claims for all of your home-based business expenses.<\/p>\n

    What expenses are tax-deductible for a small business?<\/h2>\n

    Some typical business tax deductions include:<\/p>\n