Small Business Tax Deductions for Home-Based Businesses

Tax deductions relate to expenses paid from your pocket to run your business or complete workplace duties. The Australian Office outlines eligible costs that can reduce your assessable income, minimising your final tax bill. 

As a home-based business owner, you’re more likely to invest more of your personal finances into performing your role. For instance, your energy bill will encompass personal use and electricity used to power your computer, printer, and other devices. 

Taking advantage of tax deductions can maximise your finances, allowing you to expand crucial elements of your business. Read on as we summarise the key deductions for home-based businesses you need to know about before June 30th


4 Deductions for Home-Based Businesses

A home-based business operates primarily from home, unlike an external workplace like an office or warehouse. Review four expenses you can claim on your tax return below:


Occupancy Expenses

According to the ATO in 2023, You can claim occupancy costs, such as the following:  

  • Rent
  • Mortgage bills
  • Land taxes
  • Council rates
  • Home insurance

Calculate the deductible by measuring the area of your home dedicated to work in square metres. You then compare that area to your home’s total area. Here’s a calculation you can use:

  • House (2 floors): 186 square metres = 100%
  • Home office: 8 square metres = 
  • Rent: $1,200

You can use the formula: 100% (186 sqm) – 8 sqm = 92% divided 100 = 0.92 X $1200 = $1,104. Here, the deduction would be ($1200 – $1,104) $96. 


Utility Bills

Running expenses usually encompasses utility bills, including:

  • Electricity
  • Mobile phone bill
  • Furniture
  • Repairs on furniture
  • Internet

If you don’t have a dedicated work area, you might be unable to deduct occupancy and running expenses simultaneously. For items with dual purpose (personal and professional), you must calculate the usage and take that percentage from the price you paid. 


Business Transport

Vehicle expenses cover the fuel spent on travelling to the following locations is claimable:

  • Visiting clients’ premises to deliver or provide goods and services
  • Retailers or vendors for supplies
  • Bank for business banking purposes, like depositing cash
  • Attend financial appointments with tax agents and advisors
  • Post office to send work-related documents and items like invoices or goods


Work Equipment

Work equipment like printers and accessories like ink and paper are deductible. You can claim on work-related equipment, such as computerised electronic devices. 


What Deductions Can’t You Claim?

You cannot claim refreshments like food, tea, and coffee. Personal expenses aren’t applicable either. For example, if you purchased a printer but only used it for personal documents, you cannot claim the cost of that device. 

You can’t claim further deductions on the above expenses if you receive the 0.67 cents per hour through the Fixed Rate Method. 

You may be subject to capital gains tax if you sell the house where you worked. You may not deduct this tax but could be eligible for small business CGT concessions. Ensure you maintain your tax and financial records to apply this initiative. 


Speak to Our Certified Accountants

Let’s tackle your tax return together to ensure you optimise your annual savings. Contact us to see how our certified accountants and advisors can best support you.

How to Avoid Small Business Tax Scams


Electronic tax lodgement offers a more accessible way for small businesses and individuals to meet their obligations. Unfortunately, online criminals take advantage of this convenience, with the Australian Taxation Office reporting more than 25,000 cases of impersonation in the 2021–2022 financial year alone.

Losing money to unlawful situations can have devastating effects on small businesses trying to establish themselves in their chosen industry. We’ve constructed this useful guide outlining prevalent tax scams you should know about and several tips on mitigating them.


What Are Tax Scams?

Scammers falsify their identity, posing as the ATO and misleading small businesses into paying what they believe is their business tax bill or an “excess”. Besides financial damage, responding to scams also puts businesses’ confidential information, such as direct bank details. 

Scammers are most likely to reach you through the following mediums: 

  • Phishing: Fake SMS, WhatsApp, and email messages requesting finances or information. The sender may pose as myGov or software providers.
  • Cold calls: ATO impersonators may suggest that you’ve underpaid tax and must follow a process to complete your tax bill. Alternatively, they may say you’re due a refund to steal your financial information. 


How to Avoid Tax Scams

Protect yourself by reviewing the preventative measures against tax scams below:


Understand How the ATO Communicates

The ATO enables you to assign communication preferences of:

  • Direct electronic mail via your myGov portal
  • Paper mail sent via post

Although you may receive texts or emails alerting you of unread notifications in your myGov portal, the ATO will never demand action, like paying money or submitting files using these methods. It won’t call you either.

One way to check the legitimacy of email senders is by clicking on the address. Scammers usually have odd-looking email addresses containing sporadic numbers and letters. Seeing household address providers like “” also indicates a scam.

Log into your myGov account properly and review your communication history to see all correspondence sent to you.


Avoid Application Fees

Scammers create websites offering tax file numbers (TFN) and Australian business numbers (ABN) for a fee. Avoid these websites completely and process all applications via the ATO’s website. TFN and ABN applications are free to complete, so avoid any source requesting payment.


Don’t Click on the Links Provided

Scam messages might provide a false link, posing as a shortcut to the myGov login. These links could contain malware, viruses, or trojans that could corrupt your device. 

They could also seize control over your device, downloading recording software, meaning scammers can see your activity, such as logging into bank accounts. Always use the correct process to access your financial accounts and remove messages containing suspicious links.


Get Advice From Reliable Sources

False social media accounts appearing as the ATO or other reputable tax sites could provide advice via private messages. While this advice could be highly inaccurate, meaning you submit your tax documents incorrectly, they could also demand payment or confidential login information. 

The ATO doesn’t communicate via social media, so omit any messages on these platforms. Only liaise with certified agents who can prove their credentials.


Receive Legitimate Support From Glance Consultants

Working with certified accountants at Glance Consultants gives you peace of mind, knowing your finances and information are safe. You’ll receive quality support and advice on taxes, accounting, bookkeeping, auditing, strategy planning, and more that you can trust. Contact us today to see how we can help you.


Disclaimer: Glance Consultants cannot provide legal advice. Please contact the authorities, banking institute, or a legally recognised body for support if you’ve fallen victim to a scam.

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