Business Expenses

Work out what business expenses you can claim

Did you know that the Australian Tax Office (ATO) is set to focus on small business tax returns this year, in order to crack down on the misreporting of income and expenses?

Make sure you know exactly what type of business expenses you can claim by following these three golden rules.

  1. The expense must have been for your business – not for private use.
  2. If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.
  3. Make sure you have the right records to prove your business expenses.

Tips for claiming business expenses

When filing your tax return, do not include expenses such as private rent, fines, travel, food, or renovations of a private residence as part of your business expense.

When it comes to upgrading your accounting software, ensure the business and private expense codes are correct, as you must apportion the cost of the software if you also used it for other purposes.

When claiming business expenses, ensure it is at the GST exclusive rate if you are registered for GST, not the GST inclusive rate.

If you operate your small business as a company or trust, paying private expenses from these accounts may have other tax implications such as fringe benefits tax and shareholder loans.

If you’re not sure what to claim, call us on 0407 236 103. We look forward to hearing from you!