Running a business means wearing many hats — strategy, sales, operations, team management — and tax planning often gets pushed to the bottom of the list until the EOFY rolls around.

You’d be surprised how many Australian business owners leave legitimate deductions unclaimed every year. Not because they’re doing anything wrong, but simply because they don’t realise what they’re entitled to claim, or they haven’t kept the right records along the way. 

Below are some of the most commonly overlooked deductions that our tax accountants see business owners miss, and why a year-round approach to tax planning matters.

1. Home Office Expenses

For many business owners, work doesn’t just happen in the office. It happens at the kitchen table, the study, or the spare bedroom. If you run part of your business from home, you may be able to claim a portion of home-related expenses. These can include:

• Electricity and utilities
• Internet and phone usage
• Cleaning and maintenance

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In some cases, even occupancy costs such as rent or mortgage interest can be partially deductible, depending on how the space is used for business. 

You can use two different methods to calculate your claimable expenses — the ‘Fixed Rate Method’ and the ‘Actual Cost Method’. The Australian Taxation Office provides helpful guides on claiming and calculating home-based business expenses.

The key takeaway: if your business activities regularly take place at home, it’s crucial to keep track of which costs may relate to business use.

2. Motor Vehicle Expenses

Another deduction that often gets overlooked is business-related vehicle use.

If you use your car to travel for business — such as visiting clients or attending meetings — those trips may be deductible. The ATO allows several methods for calculating claims, including the logbook method or cents-per-kilometre approach, depending on what you’re claiming. This could include:

• Fuel
• Repairs and servicing
• Interest on a loan
• Insurance
• Registration

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Where many business owners run into trouble is documentation, specifically, accurately identifying the percentage that you are claiming as business use if you also drive the same vehicle for personal reasons.

Without a logbook or clear records of business travel, deductions become difficult to justify. So, getting into the simple habit of tracking your business-related car trips throughout the year can make a meaningful difference at tax time.

Tip: If you’re using Uber or public transport for business travel, those costs may also be deductible provided you keep receipts or digital records of the trips.

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3. Software and Digital Tools

Modern businesses rely heavily on digital tools. The good news is that many software expenses are tax deductible when they’re used to run your business. Because these payments are often automated fees, they can be easy to overlook; but over the course of a year they can add up to a meaningful deduction.

This can include things like:

• Accounting and bookkeeping software
• Project management tools
• Point-of-sale (POS) systems
• Cloud storage or file-sharing services
• Website maintenance and hosting
• Customer relationship management (CRM) systems
• Inventory or booking management software
• Cybersecurity or antivirus software
• Email and productivity tools
• Internet service costs used for business
• Marketing subscriptions

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In many cases, these fees can be claimed as operating expenses in the same financial year they’re incurred. However, if the software or digital product has a ‘useful’ life longer than one year, it may need to be claimed over time through depreciation instead — a specialist tax accountant will be able to advise further.

As with other deductions, you can only claim the business portion of the expense, and you’ll need to keep invoices or subscription records to support your claim.

Related Reading: Our Guide to Tax Planning

4. Professional Advice and Training

Investing in your business knowledge is also an investment in its future. Many owners don’t realise that the following can be deductible when related to running the business:

• Accounting and tax advisory fees
• Legal advice
• Business coaching
• Industry training or professional development

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These services are considered legitimate business expenses because they directly support business operations and decision-making. In other words, the advice that helps your business grow may also help reduce your taxable income.

5. Equipment and Asset Purchases

Whether it’s a laptop, tools, office furniture, or more specialised equipment, assets used in your business may be deductible. A mistake we often see? Business owners purchase equipment during the year but forget to include it when preparing their tax return.

Depending on the value and current tax rules, businesses may be able to:

• Write off the asset immediately, or
• Depreciate it over time

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Programs like the instant asset write-off allow eligible businesses — particularly small businesses — to deduct the cost of certain assets sooner, improving cash flow by bringing tax deductions forward.

Related Reading: What Causes a Tax Audit And How to Avoid It

Why Record-Keeping Matters More Than You Think

The Australian tax system provides a wide range of legitimate deductions designed to support businesses. But those benefits only work if you know what to look for, and if you keep the right records along the way.

The biggest shift business owners can make is moving from reactive tax preparation to proactive tax planning. That’s where an experienced tax accountant is invaluable — because most business owners don’t have the time to stay across changing tax rules, track every deductible expense, or plan strategically throughout the year. But small decisions made consistently over time can produce significant financial outcomes.

Working with the right advisor means your tax position is reviewed regularly, opportunities aren’t missed, and you can focus on running and growing your business with confidence.