What is actually tax deductible?

Many people tout many things as being ‘tax deductible’, but what is actually tax deductible may be a different story. As a business owner, you need to know which expenses are tax deductible and which are not.

Work clothes

Work clothes are only tax deductible if it’s a uniform or if it’s safety clothing. Clothes that you wear to work, that you could wear elsewhere (even if you don’t), are not tax deductible. A good rule of thumb - anything that could potentially be worn for other purposes is not tax deductible.

Car expenses

If you are travelling for work, then vehicle expenses are tax deductible. However, your commute from your home to work is not tax deductible. If the vehicle is solely used for work, you can deduct all the costs, otherwise you can only claim a portion.

Meals on a business trip or shouting clients

There are three types of entertainment expenses – some are 100% deductible, some are only 50% deductible. This can be confusing, so get in touch with us to help you work out what you can claim.

Working from home

If you have a home office, you can claim a portion of all your household expenses, including:

• rates
• electricity
• home and contents insurance
• rent, or the interest portion of your mortgage repayments.

The amount you can claim varies depending on how much of the house you use for your business. We can help you calculate this and ensure the right portion of expenses are claimed as a tax-deductible expense.

Subscriptions

If you subscribe to work-related magazines, journals, or professional association memberships then these are all tax deductible.

Mobile phone

If you have a dedicated business phone, it’s 100% deductible. If you’re using it for both work and non-work activities, then it will be partially deductible.

Need tax advice that’s tailored to you?

You’re an expert at your small business, and we’re the experts when it comes to helping you with tax compliance. We’ll help you sort out your tax questions so you can get on with growing your business. Get in touch - we’d love to hear from you!