Deductions – what you can and can't claim

Before looking at what you can claim, it’s important to understand the rule behind it.

The core rule of tax deductions

An expense is deductible if it is directly related to earning your income. And:

• it is not private
• you have proof (receipt or invoice)

A simple question helps: “Did this expense help me run or grow my business?”

• If yes → it may be deductible
• If not → it usually isn’t

Common deductions

For most small businesses, typical expenses include:

• equipment and tools
• software and subscriptions
• marketing and advertising
• work-related travel
• phone and internet (business portion)

Mixed-use expenses

Some costs are partly business and partly personal. In that case, you can only claim the business portion.

Example: a phone used 50% for business → claim 50%.

GST and deductions

If you’re registered for GST:

• you claim GST credits on expenses
• and claim the net amount as a deduction

If you’re not registered:

• you claim the full amount

Common mistakes made by new business owners

• claiming personal expenses as business
• not splitting mixed-use costs correctly
• missing receipts
• overclaiming without understanding the rules

Final thought

Remember — deductions are not about claiming as much as possible, but about claiming correctly.