When it comes to small business tax deductions Australia, too many business owners miss out on legitimate claims simply because they don’t know they exist — or aren’t sure how to claim them.

The Australian Taxation Office (ATO) offers a wide range of tax-deductible expenses, but many are hidden in the fine print or require accurate recordkeeping.

If your records aren’t up to scratch, you could be handing the ATO more money than necessary. With the right approach, you can make sure you’re claiming every deduction you’re entitled to — and boosting your cash flow in the process.

Here are five overlooked small business tax deductions Australia that could save you money this financial year.

1. Small Business Tax Deductions Australia – Prepaid Expenses

If you’ve paid upfront for next year’s costs — like insurance premiums, rent, or service contracts — you might be able to claim them in the current financial year.

Why it matters: Prepaying certain expenses before 30 June can bring forward your deduction, reducing your taxable income. The rules vary based on your business size and the type of expense, so get professional advice before making large prepayments.

2. Tools, Equipment, and Business Software

From laptops and tablets to design software, accounting platforms, and cloud storage, if it helps you run your business, it’s often tax-deductible.

Common deductible items include:

• Software like Xero, MYOB, Adobe, Canva

• Subscription-based tools and project management platforms

• Email hosting and storage services

Tracking these small costs throughout the year helps you avoid missing them at tax time.

3. Vehicle Expenses for Business Use

If you use your car for work — visiting clients, attending meetings, or delivering products — you may be able to claim part of your vehicle running costs.

Eligible expenses include:

• Fuel and oil

• Servicing and repairs

• Registration and insurance

• Depreciation

ATO tip: Keep accurate records with a logbook or clear mileage tracking. Check the ATO’s official guide for more on vehicle deductions.

4. Home Office Tax Deductions

If you work from home — even part-time — you may be able to claim a portion of your home office costs.

You could claim:

• Electricity and internet

• Phone costs

• Rent or mortgage interest

• Office furniture and equipment

Choosing the right calculation method can significantly change your claim amount, so seek professional guidance.

5. Business Subscriptions and Memberships

Don’t overlook recurring expenses that automatically debit from your account.

Often-missed deductions include:

• Professional memberships and industry association fees

• Trade publications and journals

• Software subscriptions like Canva, Adobe, Xero

A quick review of your bank statements can reveal these hidden deductions.

FAQs About Small Business Tax Deductions in Australia

1. What is the most commonly missed small business tax deduction in Australia?
Many business owners forget to claim prepaid expenses, such as insurance premiums or rent, that can be brought forward into the current financial year.

2. Can I claim my home internet as a tax deduction?
Yes — if it’s used for business purposes, you can claim a percentage of your internet costs. Keep detailed records to ensure compliance with ATO rules.

3. How do I know if a subscription is tax-deductible?
If the subscription directly relates to your business activities, it’s usually deductible. Always keep receipts or statements for proof.

Maximise Your Small Business Tax Deductions in Australia

Knowing what you can claim — and how to claim it correctly — can transform tax season from stressful to smooth.

At BJT Business Advisors, we help small business owners:

• Identify hidden deductions

• Navigate ATO compliance rules

• Set up simple systems to track expenses year-round

Ready to claim every deduction you’re entitled to?
Book your free assessment today and let’s make this tax year your most profitable yet.