Most of the costs of earning your income are tax-deductible, and every dollar you can legitimately claim reduces the income you pay tax on. The principle is simple: the expense has to relate to earning your income, and you need to be able to back it up.
Two habits make all of this easy. Run your business or rental spending through a dedicated bank account so it’s separate from your personal money, and keep your receipts — scanned electronic copies are completely fine, as long as they’re backed up.
If you’re ever unsure whether something is claimable, ask us. We’d far rather hear from you early than untangle it at year-end, and quick phone calls aren’t charged.
If you’re in business or contracting
Many of the everyday costs of running your business are deductible. Common ones include:
- Office supplies
- Business-related travel — your home-to-work commute doesn’t count
- Advertising and marketing
- Professional fees, such as accounting and legal
- Business insurance
- Phone and internet
Run all of it through your business account and keep the receipts, and the year-end work largely takes care of itself.
Working from home
If you work from home, you can claim a portion of your home running costs, based on the share of your home used for business. The list usually includes:
- Rent, or the interest portion of your mortgage
- Rates
- Insurance
- Power and gas
- Repairs and maintenance
- Internet and phone
- Cleaning
So if your dedicated office is 10% of your floor area, you can claim 10% of these costs. One important condition: the space has to be a dedicated, exclusive work area — a corner of the living room or part of the kitchen doesn’t qualify. Keep records that support the proportion you’re claiming.
Your vehicle
If you use a vehicle for work, you can claim the business-use portion of its running costs — fuel, repairs, maintenance and depreciation. If the vehicle does double duty for personal trips, you’ll need a logbook to evidence the business-use percentage.
The most tax-efficient way to own a work vehicle depends on your earnings, your structure, the cost of the vehicle, the fuel type and your mileage. Talk to us before you buy and we’ll run the numbers for your situation.
Assets vs expenses
There’s a line between an everyday expense and a business asset. Items costing less than $1,000 + GST are claimed as an expense straight away. Items costing $1,000 + GST or more are capitalised and depreciated — the cost is spread across the asset’s useful life, reducing your taxable income a little each year. We handle the depreciation at year-end.
If you’ve bought business-use assets personally, we may still be able to claim them — send us a list with each item’s current market value (a Trade Me comparable is fine) and we’ll take it from there.
If you own a rental
Most of the costs of running a rental are deductible — property management fees, rates, insurance, loan interest, repairs and maintenance, and depreciation on certain chattels such as appliances and furniture. As with everything else, run it through a dedicated rental account and keep your receipts.
A few rental-specific points worth knowing:
- Repairs vs improvements. Repairs and maintenance are generally deductible, but the work has to keep the property in good condition, not improve it. Fixing a leaky roof is a repair; replacing it with a better one is an improvement. Repairing a cupboard is a repair; installing a new kitchen is an improvement. Improvements are capital and may be depreciated instead — the line is often subtle, so send us the receipts and we’ll take an informed view.
- Interest. Interest on residential rental lending is deductible in full again from the 2025–26 tax year (new builds have always been fully deductible). Different rules apply to lending that’s been refinanced or topped up, so check with us before you refinance.
- Ring-fencing. If your rental makes a loss, that loss is “ring-fenced” — it can only be offset against future rental income, not against your business or salary income.
- Keep the loans separate. Keep your rental mortgages in separate loan accounts from your personal mortgage; mixing them reduces what you can claim as interest.
Buying, selling, refinancing or switching a property to short-stay are all decisions where the tax outcome can hinge on the conversation. Please talk to us before you sign anything.
How we prepare your financials
When we prepare your annual financial statements, we do so as a compilation, under Chartered Accountants Australia and New Zealand’s Service Engagement Standard No. 2. In plain terms: we haven’t audited or reviewed the financial statements, and we don’t express any assurance on them. We compile them from the records and information you give us, and you remain responsible for the accuracy and completeness of those records. By signing or filing what we prepare, you’re confirming you’ve reviewed it for reasonableness.
None of the above is specific advice for your situation — it’s general guidance, and your circumstances matter. Before you act on any of it, get in touch and we’ll give you a straight answer.