Missing out on tax deductions? You’re not alone. Here’s how to legally reduce your tax bill and keep more cash in your business—without the ATO headaches.
When it comes to tax deductions, most Australian small business owners are leaving money on the table. It’s not that they’re intentionally doing anything wrong—it’s that they simply don’t know another way.
From overlooked expenses to poor timing, the costs add up fast. The good news? With a few smart moves, you can legally maximise your deductions, reduce your tax bill, and feel confident come June 30.
In this article, we’ll show you:
- How to document deductions that the ATO will accept
- The timing mistake that cost one client $8,000
- Common deductions most businesses forget to claim
- How you can apply these strategies in your own business
Start with the Basics: What Is a Tax Deduction?
A tax deduction is a business expense that reduces your taxable income. In simple terms, if you spend money to earn income, that expense is often deductible.
But here’s the thing—not all business expenses are treated equally, and timing, documentation, and clarity of purpose make a huge difference.
Just ask our client Dave, a self-employed landscaper. He was buying tools, fuel, even mobile phones for work—but couldn’t claim some of it because the receipts were missing or the expenses were mixed with personal purchases.
After working with us, he started saving receipts, separating business purchases, and using a simple app to track it all. The result? Over $5,000 in extra legally claimed deductions the following year.
Tip 1: Document Everything—Or Risk Losing It
The ATO Needs Proof—Not Good Intentions
The number one mistake we see? Not keeping proper documentation.
It doesn’t matter if it was a business expense. If you can’t prove it, the ATO won’t allow it. That means:
- Keep tax invoices or receipts for every claim
- Use separate bank accounts and cards for business vs personal
- Store digital copies using apps like Dext or Hubdocs
Tip 2: Timing Can Make or Break Your Tax Deduction
Why Spending Before June 30 Matters
Here’s a scenario we see all the time:
A client makes a legitimate business purchase—but they do it on July 1 instead of June 30. Now, they have to wait another year to get the tax benefit.
Tip: To claim a deduction for this financial year, the expense must be incurred in this financial year.
Even worse, we once had a client delay paying their staff’s super until July 15. It was still paid on time under ATO rules, but because it wasn’t paid before June 30—it wasn’t deductible in that year. That mistake alone cost them over $8,000.
What to do:
- Prepay expenses like rent, insurance, and software (up to 12 months)
- Make superannuation payments by mid-June, not the due date in July
- Buy business assets before the cut-off and check if they’re eligible for instant asset write-off.
If you’re unsure what timing strategy suits your business, we recommend a our tax planning session in May every year. You can book one right here.
Tip 3: Don’t Overlook the Less Obvious Deductions
The Deductions You Might Be Missing
Most small business owners know to claim fuel, tools, and phones. But here are some overlooked tax deductions you might be missing out on:
- Software and apps (like Canva, Xero, Mailchimp, Docusign)
- Website hosting and domain fees
- Online courses, books, or training related to your business
- Bank fees and loan interest on business accounts
- Business insurance
- Tax and accounting advice (yes, the cost of your accountant is deductible!)
- Uniforms and protective clothing
- Marketing and advertising, including Google Ads and Facebook boosts
- Spotify subscriptions (if used in a client-facing space)
We helped one of our clients, Ben—a mobile car detailer—boost his deductions by $3,800 just by tracking and claiming these “hidden” expenses he didn’t even know were eligible.
How to Apply This in Your Business Today
Here’s your quick action list to start maximising your tax deductions:
✅Set up a dedicated business account to avoid mixing personal expenses.
✅ Pay all Business expenses from your business account: to avoid missing out on deductions.
✅ Use an expense tracker app to snap receipts as you go
✅ Create a deductions checklist—and update it each quarter
✅ Talk to your accountant before June to plan ahead
✅ Review your last year’s return—what did you miss?
If you’re feeling a bit overwhelmed or want help reviewing what’s claimable in your business, you don’t have to figure it all out on your own.
Ready to Reduce Your Tax Bill?
Want someone to walk through your deductions and make sure nothing gets missed?
📅 Book a complimentary tax check-in to make sure you’re claiming everything you’re entitled to.
📘 Or download our free tax guides to get started on your own.
It’s not about being aggressive—it’s about being smart, informed, and organised.
