Maximising deductions at tax time
It’s almost 30 June, which means now’s the time for small businesses to get their financial accounts in order and maximise their tax deductions before the end of the tax year.
As businesses grow and operating costs increase, claiming deductions can become even more important to maintaining financial health. Over time, tax regulations can change, and failing to take advantage of eligible deductions can lead to unnecessary expenses that eat into profits. Staying proactive with deductions can help businesses keep more of their earnings, reinvest in growth, and stay competitive in an evolving market.
Many businesses, especially small ones, often overlook valuable tax deductions, missing opportunities to reduce costs each year. Failing to recognise deductible expenses such as technology costs, software subscriptions, and communication services can lead to unnecessary financial strain. Keeping accurate records and understanding which expenses qualify can help businesses maximise savings and improve overall profitability.
Hidden deductions: The everyday expenses small businesses forget
It’s very common for small businesses to forget to claim recurring costs that seem too minor to track, but add up. For example, a graphic designer using 30 per cent of their home internet for client uploads could claim hundreds annually, potentially enough to offset internet costs incurred.
- Mobile and internet use at home: even partial business use such as client calls and uploading invoices may qualify for deductions.
- Software subscriptions: accounting tools and project management platforms may be deductible if used for business operations.
- Vehicle expenses: business trips to meet suppliers or attend meetings may be claimed.
- Home office costs: electricity, internet and furniture depreciation for workspace areas may be claimable.
Taking a proactive approach and categorising expenses in accounting software throughout the year can help businesses stay organised and avoid unnecessary stress when tax time arrives.
How to leverage EOFY incentives
End-of-financial-year (EOFY) incentives reward proactive planning. Here are some ways to do that.
- Take advantage of the instant asset write-off – A professional photographer buys a $4,500 camera before 30 June. Using the instant asset write-off for assets under $20,000, they may be able to deduct the full amount this tax year, reducing taxable income immediately.
- Prepay expenses in the current financial year – A consultant pays their professional indemnity insurance 12 months upfront in June. They claim the full prepayment this financial year, improving cash flow management.
- Bring forward superannuation contributions – A freelance software developer contributes $5,000 voluntarily to their super fund. This may reduce their taxable income while boosting retirement savings, a dual benefit.These examples highlight how EOFY isn’t about last-minute scrambles but strategic timing to make sure you take advantage of all allowable incentives.
From oversight to opportunity
Leaving deductions unclaimed or misjudging EOFY deadlines jeopardises potential cash flow and growth.
Make sure you:
- Audit expenses monthly using accounting software.
- Schedule EOFY purchases such as equipment and software before 30 June.
- Consult a tax adviser to validate complex claims like home office percentages.
Things you should know
This page is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. Taxation considerations are general, based on present taxation laws and may be subject to change.
It is important to remember that tax laws are complex, and you should always ensure you’ve confirmed you can claim an expense before including it on your tax return. You should seek independent, professional tax advice before making any decision based on this information.
Reg Leis Insurance Services Pty Ltd is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.
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