Deductions sole traders often overlook

A record-keeping-first guide to common business costs that may be deductible.

A business expense may be deductible when it is incurred in earning assessable business income, is not private or domestic, and is supported by suitable records. The rules depend on the expense and your circumstances.

Areas worth reviewing include:

• The business-use portion of phone and internet expenses
• Eligible working-from-home running expenses
• Business travel in a vehicle, with records to support the method used
• Business insurance, software and professional fees
• Equipment, noting that the deduction may be claimed over time or under an applicable small-business rule

If something is used for both work and private purposes, you generally need to apportion the claim. Keep invoices, receipts, logbooks and calculations that explain how you worked out the business portion.

Do not claim a cost just because it was paid from a business account. Check that it meets the ATO rules for your business and the relevant income year.