Tax deductions

Deductions for costs incurred in running your business are allowable, provided the expenses are not of a private, domestic or capital nature.

You may be able to claim deductions for your business expenses when you lodge your income tax return, if your business:

• has motor vehicle expenses
• uses diesel fuel
• is based at your home
• has travel expenses
• uses plant, such as machinery, tools or computers.

If you're a contractor or a consultant then your personal services income can affect your tax obligations.

Entrepreneurs' Tax Offset (ETO)

If your small business has an aggregated turnover of $50 000 or less, then you should be eligible for an ETO of 25% of the tax payable on your business income. The offset phases out when your aggregated turnover is greater than $50 000 and ceases once your turnover reaches $75 000.