Helping Business Owners, Individuals, and Sole Traders with Their Tax Deduction Needs

What Can You Claim as a Business Owner?

 

As a business owner, you can claim deductions that are a direct expense you incurred while running your business every year. To make sure you get the maximum tax return possible, you should call the professional staff at Etax Plus. They will ensure you get all of the possible deductions to reduce your taxable income. This is important because the ATO calculates your taxable income through this formula:  Assessable income (income subject to tax) – tax deductions = your taxable income (the amount you pay tax on). Naturally, you want to be able to pay in as little as possible. The deductions you can claim as a business owner are listed below.

  • Diesel Fuel Expenses

  • Machinery, Tools or Computer Expenses

  • Motor Vehicle Expenses

  • Operating Expenses in the year you pay them like wages and office stationery.

  • Travel Expenses

  • Website Expenses

If you ever pay for anything related to your business out-of-pocket, keep the receipts. It is also a good idea to document where and when you made the purchase as well. Even if you're not sure whether or not you can claim something as a deduction, save the receipt and bring it into the Etax Plus staff, and they'll help you reduce your taxable income.

 

What Can't You Claim as a Business Owner?

 

There are several things you can't claim as a business owner, and those are listed below.

  • Entertainment Expenses - If you go to business lunches or social functions for your business, you generally can't claim these as deductibles. 

  • Home Office Expenses - Even though working at home is getting more popular; you are still restricted with what you can claim as a deduction. If you work at home outside regular business hours and have an office in another place, you can't claim any home office expenses.

  • Home to Work Travel - This includes if you work on call and have to leave your home to go to work, you can't claim this travel. 

  • Phone Use - You will only be able to claim a small portion of any business-related calls, and these are averaged out over a four week period. 

  • Self Education Expenses - You can't claim conferences, seminars, or training as a deductible.

 

What Can You Claim as an Individual?

 

If you're an individual that is attempting to do your taxes, you have access to a few more deductions than your standard business owner or sole trader. You want to make sure that you're getting the most out of your tax refund, and Etax Plus has tools to help you. If you want to look up an ABN, they have an easy tool to assist you. If you're looking for a business name, you can do this through their website as well. They also have a blog with many useful posts. One such post is about common mistakes individuals make on their tax returns. If you're still not sure what you can claim on your taxes, several things are listed below.

  • Clothing - If you had to buy a uniform or protective clothing for work you can claim it if you didn't get reimbursed. 

  • Donations or Gifts - The organization you gave the donation or gift too must be a deductible gift recipient (DGR). 

  • Home Office - You can claim anything you use for work from your home office including your computer, phone, and costs for running these things.

  • Interest, Dividend, or Investment Income - You can deduct any expenses you paid related to investment income, interest, or dividends. 

  • Miscellaneous Expenses - If you spend money on something related to your work, you can usually claim it as a deduction if you keep the receipt. 

  • Self Education - If you took classes related to your field of work, you could claim them.

  • Vehicle or Travel - You can deduct car or travel expenses as long as you're going somewhere for your business. 

What Can't You Claim as an Individual?

 

There are several things you can't claim as an individual, and they are listed below. 

  • Certain Clothing Expenses - If you buy clothing that isn't specific to your job, you can't claim this. 

  • Private Travel Expenses - You can't claim travel to and from work as this is considered private travel.

  • Rent - If you work from home, you usually won't be able to claim things like housing insurance, mortgage insurance, or monthly rent payments. 

 

What Can You Claim as a Sole Trader?

 

As a sole trader, it is essential that you are well aware of the deductions you can and can't claim come tax time, and this is where Etax Plus comes in. They will help you maximize the amount of a refund you get, or they will help you lower the amount of money you end up paying in. You can claim deductions if those deductions are specifically related to maintaining your business. The deductions you can claim each year are listed below.

  • Advertising Expenses 

  • Bad Debt Payments

  • Bank Charges

  • Business Motor Vehicle Expenses

  • Business Related Home Office Expenses

  • Business Related Telephone Bills

  • Business Travel

  • Education and Training

  • Insurance

  • Interest

  • Professional Memberships

  • Repairs and Maintenance

There are also a few miscellaneous expenses you can claim depending on the trade you work in. For example, if you're a mechanic or use a lot of tools at your everyday job but don't have a secure place to store them, you can claim your travel expenses to and from your work as long as you have your tools in your car.

 

What Can't You Claim as a Sole Trader?

 

There are several things you can't claim as a sole trader, and they are listed below.

  • Domestic or Private Expenses - Childcare costs/fees and clothing for your family

  • Non Accessible Income - Money you earn from a hobby

  • Non-Deductable Expenses - Entertainment and parking fines

This post has gone over what you can and can't claim on your tax return as a business owner, individual, and sole trader. If you have further questions, it is a good idea to contact Etax Plus, and let them assist you in this process.