Claim Tax Deductions For Your Business Expenses

Claim Tax Deductions For Your Business Expenses

Do you run a business but aren’t aware of what deductions you can claim when it comes to tax time? Here’s a brief guide on what you claim and what not, the procedure for claiming, and the right time to file a claim.

No matter, what business you own, you can claim a tax deduction for most expenses incurred in running it, but make sure the expenses are directly related to earning your assessable income.

3 Golden Rules Followed By The ATO To Accept A Deduction As Valid

  • The expense must have been for your business, not for private use.
  • If the expense is both for business and private use, you can only claim the business portion.
  • You must have records to prove an expense done.

The GST calculated and charged on a purchase can’t be claimed. The expenses done for the safety of the staff during business hours can be claimed. Fringe Benefits Tax is also deductible to some extent.

What Can’t Be Claimed?

Some expenses that are not deductible are:

  • entertainment expenses
  • traffic fines
  • private or domestic expenses
  • expenses relating to non-assessable income
  • the GST component of a purchase on BAS

The Best Time To Claim Your Deduction

When it comes to determining when to claim a deduction, the process entirely depends on the type of expense one wants to claim. Generally, you can claim:

  • operating expenses (such as office stationery and wages)
  • capital expenses (such as machinery and equipment)

How To Claim A Tax Deduction?

Claiming a business deduction depends on the type of business you run:

Sole proprietors: should use myTax or a licenced tax agent to file their individual tax returns.

Partnership: should claim the deductions in your return for the partnership tax.

Trust: should claim the deductions on your tax return for your trust.

Company: should deduct the expenses in the company’s tax return.


So, these were some basic guidelines for claiming tax deductions for a business. To know more, feel free to consult our tax accountants at KPG Taxation. We leave no stone unturned to serve you with the best tax services.

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