Small Business Tax Deductions
You Shouldn’t Miss in 2025
It’s a new financial year. It’s crucial you plan ahead to ensure you’re maximising your tax deductions to reduce your taxable income and improve cash flow. Here’s a comprehensive guide to the key deductions available to small businesses for this 2025 financial tax year:
Instant Asset Write-Off
For the 2024–25 income year, small businesses can immediately deduct the full cost of eligible assets costing less than $20,000. This applies to multiple assets, provided each individual asset is under the $20,000 threshold. Conditions apply.
Home Office Expenses:
If you operate your business from home, you can claim deductions for a portion of your household expenses, including:
- Electricity and heating/cooling costs
- Depreciation on office furniture and equipment
- Internet and phone expenses
The ATO offers two methods for calculating these expenses, for more information contact us.
Vehicle and Travel Expenses
If your vehicle is used for business purposes, you can claim deductions for:
- Fuel and oil
- Repairs and maintenance
- Insurance
- Registration
- Depreciation
Ensure you maintain a logbook to substantiate your claims.
Professional Development
Expenses related to improving your skills and knowledge directly related to your business activities are deductible.
Bad Debts
If you have debts that are unlikely to be recovered, you can write them off as bad debts. This can reduce your taxable income but, ensure you have made reasonable efforts to recover the debt before writing it off.
Superannuation Contribution
Contributions made to your employees’ superannuation funds are deductible. Ensure these contributions are made before the due date to claim the deduction in the current financial year.
Small Business Income Tax Offset
If you’re a sole trader, you may be eligible for the small business income tax offset, which can reduce the tax you pay on your business income by up to $1,000 each year. Conditions apply. If you have any questions or need assistance in maximising your deductions, please don’t hesitate to contact us.