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What I can deduct on my tax?

This morning I got an email from Patty, who is just starting out in her consulting business.

She wanted to know about invoicing and about what she can deduct at the end of the tax year.

Here’s my answer:
By now you would have received the first of my template series, and therefore you’ll have the invoicing template.

The what you can claim at tax time question is more complex. You will need an accountant to tell you exactly. It will depend on what structure you use (partnership, not for profit, pty ltd, sole trader) and what you do (IT has different deductibles than training does, for example), but here are some of the things I have deducted in 20 or so years of consulting:

  • stationery
  • internet and mobile phone bills (at least a percentage of them)
  • postage and courier charges for work-related parcels
  • insurances (workers comp, professional indemnity, public liability, business equipment if you think it’s worth it)
  • car-related expenses (where you going from client to client, not to get to a client)
  • training for work-related skills

When you subscribe to my templates series you can download my magic charge-out formula spreadsheet. It lists a huge number of expenses, most of which would be deductible. But as I said, please talk to your accountant! The magic charge out formula is explained in great detail in my book.

For the Australian environment particularly It’s Official goes through some of your other obligations to the tax office. It’s book number 3 in a series of 11 which will help you set up properly.

Click here to buy the book.

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