Because businesses get taxed on their income minus any business expenses, you can claim back all or a portion of your expenses. It’s important to keep records of everything, as all receipts, including those for items under $50.00, need to be kept for seven years. A good way to keep track is to take a photo of your receipts and store them online in a secure place.
So what business expenses can you claim?
Expenses you can claim include:
What about entertainment expenses?
Entertainment expenses include any activity involving food and beverage, including client gifts.
You can claim for entertainment expenses, but these are generally only 50% deductible due to the private element involved.
There are some instances where entertainment expenses are 100% deductible if they’re entirely business related, such as meals an employee buys while travelling on business, or food and drink provided at a conference that lasts at least 4 hours.
There are quite a few very specific conditions for 100% deductible entertainment expenses though so it pays to chat to our accounting team.
What can I claim for motor vehicle use?
Vehicle expenses can be claimed based on the amount of business use compared to private use.
If you’re a sole trader, you have two options for claiming motor vehicle expenses:
For motor vehicle use, you can’t claim things like parking infringements or speeding tickets.
What about my home office?
If you use an area of your home for your business, you can claim a portion of the household
expenses such as rates, insurance, mortgage interest, rent and power.
If you have a dedicated space, you can claim based on the size of the space compared to the total floor space of your home. If the area is used both personally and for business you’ll need to take into account the amount of time spent on your business activities and the area used. Keep a record of these expenses so you can access them easily at the end of the year.
If you’re not sure what you can claim, or you’d like help sorting out your expenses, our friendly accounting team is happy to help! Get in touch with us today.
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