Small Business Tax Return Guide: Maximise Your 2025 Tax Deductions and Refund
Running a business? Good on ya, you brave, spreadsheet-wielding entrepreneur. But if you want to keep more profit in your pocket and less in the ATO’s, you need to nail your deductions and avoid tax traps. Here’s the ultimate Gotax 2025 guide to small business tax returns that’ll help you maximise deductions and boost that juicy refund.
What Business Expenses Can You Deduct?
The ATO has one golden rule: if the expense helps you earn income, it’s probably deductible. But not everything is a straight-up deduction. Some get spread out over time, and some aren’t deductible at all. Let’s sort the gold from the glitter.
Repairs vs Maintenance vs Capital Improvements
-
Repairs: Fixing stuff that’s broken from business use—like a smashed shop window. Fully deductible when paid.
-
Maintenance: Routine TLC like painting, servicing your van, or fixing your aircon. Deductible in the same year.
-
Initial Repairs: Bought something damaged? Fixes made to existing faults before starting the biz aren't deductible immediately. These get added to your cost base.
-
Capital Improvements: New gear, upgraded kitchen, or fresh fit-out? You can’t deduct it all at once. Spread it out over the asset’s life using depreciation or capital works.
Legal Fees
-
Deductible: Contracts, chasing late invoices, resolving employee dramas.
-
Not Deductible: Legal costs tied to buying or selling your business/assets—capital costs.
Depreciation: Spreading the Love
Most biz stuff (like laptops, utes, coffee machines) can’t be written off in full—unless you’re eligible for simplified rules. Usually, you deduct a little each year. If you qualify for small business write-offs, you might be able to write off the whole shebang up to a certain amount.
Car Expenses: Vroom with Caution
Driving to client meetings, deliveries, or picking up stock? That’s deductible.
-
Cents per kilometre: Up to a cap, easy peasy.
-
Logbook method: Keep a 12-week logbook and claim a % of all costs.
No, trips from home to your regular business location don’t count.
Cost Base of Your Business (For When You Sell)
Your cost base helps you figure out your tax when you sell the business. It includes:
-
What you paid for the business
-
Equipment and fit-outs
-
Legal and accounting costs
-
Improvements and major purchases
-
Stamp duty and transfer fees
Keep your records tidy for 5 years post-sale.
Watch Out for These Traps
-
Claiming personal stuff (groceries ≠ business)
-
Not apportioning shared use expenses
-
Thinking you can claim entertainment (nope, footy tickets don’t count)
-
Home office? Only claim the business portion
-
Paying family without proper wages or records
-
Claiming GST when you’re not registered
-
Forgetting to declare all your income (yes, even cash jobs)
Example Time
-
Repair: Shop window smashed—claim it.
-
Maintenance: Regular service on your ute—yep, claim it.
-
Improvement: Bought a new fridge—depreciate it.
-
Legal: Chasing a dodgy client? Deduct it.
-
Car: Client meeting drive—claim business portion.
-
Private: Groceries on biz card—nope.
10 Common Questions
Q1: Business phone—deductible? A: Yep, just the business portion.
Q2: Home internet? A: Yes, if used for biz. Keep usage records.
Q3: Work clothes? A: Only if they’re branded or protective gear.
Q4: Late-night meals? A: Not unless you're away overnight.
Q5: Business website costs? A: Absolutely. Setup and hosting—both deductible.
Q6: Business loan interest? A: Yes, if it’s for the biz.
Q7: Gifts to clients? A: Yes, unless they’re entertainment (e.g. show tickets).
Q8: What records to keep? A: Receipts, contracts, invoices—everything!
Q9: Training courses? A: If relevant to your biz—deduct it.
Q10: Selling the business? A: You may owe tax on profit. Your cost base helps reduce that.
Maximise Your Refund the Smart Way
-
Track everything with eCashbooks—perfect for small businesses!
-
Don’t forget your car logbook
-
Separate biz and personal expenses
-
Ask the Gotax team if you’re stuck—we’re real humans (and real funny, too)
Why Use GoTax for Your Small Business Tax Return?
Because it’s the fastest, easiest, and cheapest way to get your small business tax return sorted in Australia. No jargon, no fuss—just plain English, real deductions, and expert-reviewed returns. Whether you’re a tradie, freelancer, café owner, or side hustle king, GoTax has your back.
And when it comes to staying organised all year round, eCashbooks.com is your go-to bookkeeping mate. It does your BAS, tracks expenses, handles invoices, and keeps your tax-time stress-free.
Self Employed Tax Returns Start Now
Rideshare Tax Returns Start Now
Freelancer Tax Returns Start Now
Leave a Comment