Deductions for costs incurred in running your business are allowable, provided the expenses are not of a private, domestic or capital nature.

You may be able to claim deductions for your business expenses, when you lodge your income tax return, if your business:

• has motor vehicle expenses
• uses diesel fuel
• is based at your home
• has travel expenses
• uses plant, such as machinery, tools or computers.

From 1 July 2005 the Entrepreneurs' Tax Discount will provide tax cuts for small and home-based businesses. If your annual turnover is $50 000 or less then you will be eligible for a 25% discount on your income tax liability. The 25% discount will phase out at one percentage point for each thousand dollars of turnover above $50 000, ceasing once annual turnover exceeds $75 000.

If you are a contractor or a consultant then your personal services income can affect your tax obligations.

This information is brought to you by business.gov.au and Cairns Chamber of Commerce
business.gov.au - Your business gateway to government information and services