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 are a contractor or a consultant then your personal services income can affect your tax obligations.
Entrepreneurs' Tax Offset (ETO)
If you are a small business entity and have an aggregated turnover of $50 000 or less, then you will 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.
