Tax season is considered the most important and stressful aspect for every business. However, do you know that you can lower income tax bills by applying for possible tax deductions? Most probably, business owners don’t know what they can claim and what they cannot. If you are among them, then you must hire a tax accountant for your business, or you can hire one near your location by searching for ‘tax accountant near me’. In today’s blog, we’ll discuss what exactly business tax deduction is and what and when business owners can claim business tax deductions.

What are Business Tax Deductions?

You can lower your income tax bills by claiming tax deductions for expenses that are involved in running a business.

What can You Claim as a Tax Deduction?

A tax deduction you are eligible for will be those expenses related to your business and earning your assessable income. The following are three basics that every accountant knows about what the ATO accepts as a valid business tax deduction:

  • The costs or expenses must be related to your business, not for private use.
  • If the cost is for business as well as private use, then you will be allowed to claim the portion that you have used for business use.
  • You must have a record of each expense to prove it.

If you are not aware of these conditions, then it would be best to take help from an accountant. You can search for ‘tax accountants near me’ if you want to hire the best tax accountant. Take a look at the following section to know what you can claim for expenses:

  • Motor Vehicle Expenses

Being a business owner, you can claim a tax deduction for costs for motor vehicles, such as cars and other vehicles that are used in running a business. Cars come under the motor vehicle category and are designed to carry: a weight of less than one tonne and fewer than nine travellers. Other vehicles are: motorcycles and vehicles designed to carry either: load one tonne or more, nine travellers or more.

You can claim: lease payments, registration, fuel and oil, repairs and servicing, insurance cover premiums, and depreciation. If you don’t know these business tax deductions, then you must hire an accountant and if you want to hire an accountant near your local area, then you can search for ‘accountants near me’.

  • Home-Based Business Expenses

If you run some or all businesses from home, then you are eligible to claim tax deductions. Home-based business expenses include:

  1. Occupancy expenses (such as council rates, mortgage interest, house insurance premium and land taxes)
  2. Running expenses (such as phone, electricity, furniture and furnishing repairs, cleaning, the decline in value of equipment and plant)
  3. The costs of motor vehicle trip between your home and other places if the travel is for business purpose.

Most probably, an accountant knows these conditions, so you can hire a professional accountant for your firm by searching ‘accountant near me’ to find an accountant near your location.

  • Business Travel Expenses

If you or your workers are travelling for business purposes, then you can apply for tax deductions. The following are expenses you can claim:

  1. Bus, taxi, tram, or ride-sourcing fares
  2. Airfares
  3. Fees for car hire and the expenses you obtain (such as tolls, fuel, and car parking) when hiring a car for business purposes
  4. Accommodation
  5. Meals

To claim costs for overnight travel, you need to have a permanent residence elsewhere, and your business must need you to stay away from your house overnight.

  • Repairs, Replacements and Maintenance Expenses

You can claim a tax deduction for costs relating to repairs, replacements, and maintenance of machinery you use to generate business income until your expenses are not considered capital expenses. You can claim expenses that include:

  1. Conditioning gutters
  2. Painting
  3. Mending leaks
  4. Repairing machinery
  5. Repairing electrical appliances
  6. Maintaining plumbing
  • Employees’ Salaries, Wages and Super Contribution

Being a business owner, you can claim a tax deduction for:

  1. The wages and salaries you pay to your employees
  2. Making a super contribution on time to a complying retirement savings account (RSA) for your workers and contractors.
  • PAYGW Payments

You can claim a deduction for payments you give to your employees from July 1, 2019, where you have complied with PAYGW, which stands for pay-as-you-go withholding. If the PAYG withholding rules need you to withhold an amount from a payment you give to a worker, you must:

  1. Before you pay the amount to them, withhold the amount from the payment
  2. Report the amount to the ATO
  • Digital Product Expenses

Being a business owner, you can claim a tax deduction for the expense of digital products used for business purposes. Operating expenses are those you obtain every day for business, such as:

  1. Fees of the internet service provider
  2. File-sharing services
  3. Lease payments
  4. Cloud storage
  5. Expenses of running a website

On the other hand, capital expenses include expenses associated with replacing, establishing, or improving your business:

  1. Mobile phones and tablets
  2. Cameras
  3. POS machines
  4. Computers and computer accessories
  5. Cost of developing a website


Now, you may know the importance of accountants as they have a vast knowledge of tax deductions and can help you save money. Despite this, you can avail accounting and bookkeeping services in Australia. If you want tax accounting solutions, then you can contact Accountants in Melbourne.

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