Small Business Tax Deductions for Individuals 2025 – Q&A Guide

Running a small business as a sole trader or individual in Australia means you can claim a range of tax deductions on your 2025 tax return. The ATO has specific rules about what you can and can’t claim, how to keep records, and what to watch out for. This Q&A guide covers the most common questions about small business tax deductions, so you can get your online tax return right and make the most of your business expenses.

Q1: What can I claim as a small business tax deduction in 2025?

You can claim expenses that are directly related to earning your business income, like rent, utilities, office supplies, equipment, and business travel.

Q2: Can I claim home office expenses?

Yes, if you run your business from home, you can claim a portion of your rent or mortgage interest, electricity, internet, and phone.

Q3: What about motor vehicle expenses?

You can claim business-related car expenses using either the cents per kilometre method (88c/km up to 5,000km) or the logbook method.

Q4: Can I claim the cost of tools and equipment?

Yes, you can claim the cost of tools, equipment, and assets used for your business. If they cost less than $20,000, you may be able to claim the full amount instantly.

Q5: Are business meals and entertainment deductible?

Generally, no. Meals and entertainment are only deductible in limited circumstances, like when travelling overnight for business.

Q6: Can I claim business travel expenses?

Yes, you can claim travel costs like flights, accommodation, and meals if the travel is for business purposes.

Q7: What about GST?

If you’re registered for GST, claim the GST-exclusive amount as your deduction. If not, claim the full amount paid.

Q8: Can I claim wages paid to employees?

Yes, wages, superannuation, and other employment costs are deductible.

Q9: Are website and marketing costs deductible?

Yes, costs for websites, advertising, and marketing are claimable business expenses.

Q10: Can I claim insurance premiums?

Yes, business insurance premiums (like public liability or professional indemnity) are deductible.

Q11: What records do I need to keep?

Keep invoices, receipts, bank statements, and records of all business income and expenses for at least five years. Use Deduction Grabber to stay sorted — https://www.gotax.com.au/deduction-grabber

Q12: Can I claim start-up costs?

Yes, you can claim certain costs for setting up your business, like legal and accounting fees.

Q13: What about bad debts?

You can claim a deduction for bad debts that you’ve written off and have already included as income.

Q14: Can I claim interest on business loans?

Yes, interest on loans used for business purposes is deductible.

Q15: Are training and education costs deductible?

Yes, if the training is directly related to your business.

Q16: Can I claim depreciation on business assets?

Yes, you can claim depreciation on assets over their effective life, or use instant asset write-off if eligible.

Q17: What if I use something for both business and private use?

Only claim the business portion of the expense.

Q18: Can I claim superannuation contributions for myself?

Yes, you can claim a deduction for personal super contributions if you meet the eligibility rules.

Q19: What about legal and accounting fees?

Yes, fees for managing your business tax affairs are deductible.

Q20: How do I make sure I’m claiming correctly?

Use the ATO’s small business tax-time toolkit, keep good records, and if in doubt, check with a registered tax agent. And don’t forget to log it all in Deduction Grabber!

Signup to GoTax and not only get your tax return done, you can also ask as many questions as you like and get informed answers. You have access to the equivalent of a Tax Einstein — that is our very own D.e.r.e.k as well as the best credentialed Tax Accountants around.

Check out our Craaaaazy Tax Questions page at: https://www.gotax.com.au/crazy-tax-answers