You can claim tax deductions for most costs involved in running your business. This helps to reduce the income you pay tax on. Find out what expenses you can claim, when to claim, and the records you need to keep.
How tax deductions work
When you do your tax return, you can claim most business expenses as tax deductions to reduce your taxable income.
The Australian Taxation Office (ATO) calculates your taxable income using this formula:
Assessable income – tax deductions = taxable income
Most money you get from running your business is assessable income (income subject to tax).
Expenses you can claim as a deduction
You can claim most expenses involved in running your business. Just make sure:
they relate directly to earning your income
the expense must have been for your business, not for private use
if the expense is for a mix of business and private use, you can only claim the portion that is used for your business
you have records to substantiate what you claim
You may be able to claim deductions for the following types of business expenses: