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FalzonFinancial
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Hi,

Pursuant to section 8-1 of the ITAA97′ businesses are able to deduct expenditure where it has a relevant connection with income earning activities, providing it is not prohibited by one of the four negative limbs. The main ones being private in nature or other legislation doesn’t allow the deduction.

Providing your $40,000 is deductible you generally will pay tax on your profit (excluding GST if you are registered).

Hope this helps.

Matthew