Smart Money Moves: Grow And Save With Business Tax Deductions
Tax time doesn’t need to be a scramble. EOFY is a golden opportunity for brokers working with small businesses to add value, support clients with actionable insights, and strengthen long-term relationships. One of the most effective ways to do that is to understand how small business tax deductions can cut costs and fuel growth.
From operating expenses to asset write-offs, innovative deduction strategies can help clients lower taxable income and put those savings to work.
This article will explore key deductions SMEs can consider, how they can unlock growth potential, and how brokers can guide clients toward better financial outcomes.
Whether you’re working with a startup or a small to medium business, this blog post offers tools to support your clients through EOFY and beyond.
What Makes Business Tax Deductions Vital During EOFY?
EOFY is when small business owners reassess their performance and make strategic plans for the year ahead. It’s also when they can check for tax deductions that they’re eligible for.
The Australian Taxation Office (ATO) has three golden rules for small business tax deductions:
- They must be expenses related to business use
- They must help generate assessable income
- Businesses must have a record like a receipt, invoice, or logbook
The ATO website provides helpful information for new and small business owners on how to claim tax deductions.
Brokers can walk clients through these rules to potentially reinforce good record-keeping habits and open the door to broader conversations about tax planning, funding, and goal alignment.
Brokers can consider helping clients avoid missed opportunities by initiating EOFY check-ins and encouraging clean record-keeping habits year-round.
For instance, reminding clients that they can claim a deduction in the financial year the cost was incurred, even if payment was made later, can make a difference during EOFY.
Notable Tax Deductions For SMEs
Many expenses related to business use and their eligibility for tax deductions may fall under the radar before June 30.
Here are a few essential expenses that brokers can bring up during discussions with clients.
Small Business Pool
Small businesses with a turnover under $10 million may be eligible for the simplified depreciation rules through the Small Business Pool.
This can allow businesses to claim deductions on depreciating assets at a rate of 15% in the first year and 30% each year after.
The amount can be claimed in full if the total balance is under the immediate write-off threshold.
This rule can benefit SMEs with multiple low-value depreciating assets such as office chairs, laptops, or other work tools.
Rather than spreading out the depreciation over several years, businesses can immediately deduct this from the full cost.
Brokers may want to consider guiding clients in reviewing their fixed asset register and determining what qualifies under the simplified depreciation rules.
This can benefit tradies, retail shops, or hospitality venues that regularly replace or upgrade equipment. A mid-year asset audit could reveal hidden opportunities to claim.
Repair And Maintenance
Necessary upkeep of business property or equipment is unavoidable, like fixing a leaking pipe in a commercial kitchen or servicing a company car.
You can claim a deduction on these business expenses as “repair and maintenance expenses,” and they are generally deductible in the year incurred.
It’s important to distinguish between repairs and improvements. Repairs restore something to its original condition, while improvements enhance it.
Brokers can provide additional value by helping clients document and separate these costs properly, ensuring repairs are deductions businesses can claim now and improvements are managed appropriately.
Repainting, replacing broken parts, or servicing machinery are common examples of repairs that constitute valid business deductions.
Operating Expenses
Day-to-day business expenses like rent, electricity, internet, phone plans, employee salaries, accounting fees, and marketing spending are considered operating expenses.
They are allowable business tax deductions if directly tied to earning business income.
During busy service periods, some expenses may slip through the cracks.
Brokers can encourage small business clients to use accounting software or apps to track and categorise expenses in real-time.
Even seemingly minor deductions, when added up over 12 months, can substantially impact a tax return if the business is able to claim them.
Marketing expenses, including online ads, promotional materials, and other costs, may also be overlooked. Brokers can also remind clients about subscriptions, licensing fees, and software costs essential to daily operations.
Mixed-Use Expenses
Many small businesses use equipment or services for both personal and business use.
This is common with home-based businesses, small business entities, and sole traders.
In these cases, you can only claim a deduction on the business portion of the expense.
Examples of expenses applicable to both business and private use typically include:
- Mobile phone plans used for personal and business purposes, such as client calls
- Internet service shared between personal browsing and business research or meetings
- Vehicles used for deliveries during the day and family errands after hours
The ATO expects a reasonable calculation method for separating business and private use.
Brokers can recommend that clients maintain a usage logbook or digital tracking report to support their claims.
A typical calculation method for phones and the internet is to average business and private use based on call logs or data consumption over a representative four-week period.
This can also serve as a chance for brokers to educate clients on how to maximise the amount they can claim responsibly and avoid overestimations that could lead to audits.
Additional Common Deduction Categories
Let’s look at some other deductions that brokers can point out during EOFY planning sessions:
- Tax management expenses, like tax agent fees, accounting software, or even educational webinars on tax planning. These fall under administrative costs and are claimable as business tax deductions.
- Prepaid expenses for items such as insurance premiums or rent paid in advance for up to 12 months. Brokers can typically advise clients on when to make these payments for optimal timing.
- Self-education expenses that are directly related to improving skills in the business’s industry. From trade certifications to online business courses, claiming the costs involved can possibly increase tax returns.
- Employee superannuation contributions that are paid on time. Late super contributions aren’t deductible and could incur penalties. Brokers can consider highlighting this to growing businesses that have recently added staff.
- Instant Asset Write-Offs (IAWO) for eligible assets under $20,000 used or installed by EOFY. Brokers may want to suggest that SMEs time their purchases to be able to claim them by June 30.
How Brokers Can Further Assist Their Clients
EOFY presents a valuable touchpoint for brokers to check in with clients and offer advisory services beyond financing.
Mid-Year Check-Ins Compared To Initial Growth Plan
Were the growth plans set at the start of FY2025 met, delayed, or surpassed?
These check-ins allow brokers and their clients to reassess needs, identify gaps, and implement practical solutions based on real-time business performance.
Brokers can compare financial statements, review goal progress, and suggest tax-smart adjustments for the remaining half of the year.
A meeting with a business client to review their performance from the previous income year and discuss goals can uncover insights that lead to new opportunities.
Assess Client’s Current Needs
Does the business need new staff, better equipment, or repairs? Could those costs be claimed now?
Understanding current gaps can allow brokers to offer suitable funding options like Lumi’s Business Line Of Credit, which offers flexibility while supporting strategic purchases.
By asking the right questions, brokers can uncover under-resourced areas of a business and help clients decide whether to invest now or wait until the next financial cycle.
Recommend Smarter Record-Keeping Practices
Introduce clients to accounting tools that help track expenses in real time.
Many tax-deductible expenses go unclaimed because receipts are lost.
Brokers can add real value by suggesting simple financial hygiene.
This might include recommending bookkeeping apps, advising on cloud-based software subscriptions, or setting up monthly check-ins to review and categorise tax-deductible expenses.
Better records can usually lead to more accurate and complete deductions.
Conclusion
Business tax deductions aren’t just a once-a-year concern.
When brokers and clients treat tax deductions as part of a broader financial strategy, they can unlock powerful benefits—from stronger cash flow to smarter investments and faster growth.
Many small businesses may miss claiming deductions and getting tax returns due to poor record-keeping or a lack of awareness.
However, with the proper guidance and tools, SMEs can make the most of the end of the financial year.
Brokers have a unique opportunity to lead that charge by supporting compliance, savings and confidence every step of the way.
Ready to help your small business clients maximise EOFY savings? Connect with the team at Lumi to learn how our lending solutions can complement your financial guidance.
