A common question accountants hear from micro and small business owners is: “Can I claim this expense and, if not, why not?” Below are some of the most frequently queried small business expenses and my advice on whether they can be claimed. 

Can I claim travel?

You can claim travel expenses as long as that travel is related to you earning an income. As you are in small business you need to keep a logbook to track all your business trips to work out your business percentage of total travel. You can then claim that percentage of your vehicle’s total costs. 

Can I claim education expenses?

Self-education is a tax deduction as long as there is a direct link between the study and you earning an income. If you were considering doing a TAFE course, you would have to pay for that TAFE course for it to be deductible in that year. HELP payments are not tax deductible. 

You can also claim a deduction for journals or magazines that are directly linked to increasing your income. 

Can I claim travel to my accountant?

Yes, you can claim travel to your accountant for meetings or to prepare your tax return, as well as associated tax agent fees. 

Can I claim home office expenses?

Yes you can claim home office expenses on tax and there are two common methods used to calculate this. The first is the “34 cents per hour” method. Here, you will need to keep a diary of your hours worked from home (a record of hours worked in a four-week period is sufficient to establish a pattern for the whole year) then calculate 0.34 x total hours worked to find your home office running expense deduction. 

The second method is where you can claim all occupancy expenses – such as rent or mortgage interest, council rates, house insurance premiums, electricity, phone and internet and decline in value of office furniture items. Obviously if you are claiming these expenses for your principal place of residence you may be subject to capital gains tax when you sell. 

Can I claim superannuation as a deduction?

Yes you can claim superannuation for yourself as a tax deduction. 

What other small business expenses are you unsure about claiming?

“ Self-education is a tax deduction as long as there is a direct link between the study and you earning an income. ”
 
Brad  Callaughan

Brad Callaughan is a specialist in taxation, accounting and business advisory. He is the managing director of Callaughan Partners that was formed to deliver and exceed client’s expectations, whilst charging upfront fees.

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