Tax time can be overwhelming for business owners, especially if you’re unsure about what needs to be lodged, what you can claim, and how to prepare. Whether you’re a sole trader, part of a partnership, or run a company, it’s essential to know your tax obligations. To help you get sorted, we’ve answered the most common business tax questions for the 2024–25 financial year.
Do I Need to Lodge a Business Tax Return?
Yes — if you operate a business, you must lodge a tax return for the 2024–25 financial year, even if your business hasn’t earned any income. There’s no minimum income threshold for businesses.
The way you lodge your return depends on your business structure:
- Sole Traders
Lodge an individual tax return. You don’t need to lodge a separate business return. Just include all your business income and expenses along with any other income you earned. The ATO calculates your tax based on this. - Partnerships
The partnership itself needs to lodge a separate return under its own Tax File Number (TFN). However, each partner must also report their share of income (and losses) in their personal tax return. Note that the partnership doesn’t pay tax — the partners do. - Companies
Must lodge a company tax return and pay tax on company profits. Directors still need to lodge individual tax returns for any income they’ve received. - Trusts
Trusts have their own TFN and must lodge a trust tax return. Any distributions to beneficiaries must be reported in their individual tax returns.
How Can I Lodge My Tax Return?
You have a few options:
- Individuals (including sole traders) can use myTax through ATO online services.
- Businesses typically lodge through Standard Business Reporting (SBR)-enabled software.
- You can also lodge via a registered tax agent if you prefer professional help.
- For secure access, the myID Digital ID app is recommended when logging into the ATO’s services.
What Business Expenses Can I Claim as Deductions?
The ATO sets out three golden rules for business deductions:
- The expense must be for business purposes, not personal use.
- If it’s split between personal and business use, only claim the business portion.
- You must have records to prove the expense (keep them for at least 5 years).
Common deductible expenses include:
- Motor vehicle use
- Home office and utility costs (for home-based businesses)
- Employee wages and super contributions
- Business travel
- Software and digital tools used in your business
Keeping accurate, well-organized records all year round will make claiming deductions easier.
What Are My Tax Obligations as an Employer?
If you have employees, you must:
- Finalize your Single Touch Payroll (STP) reporting by 14 July, so your employees can access their income statements for their own tax returns.
- Include all employees you’ve paid during the financial year, even if they’ve since left the business.
Also, remember to meet your obligations for superannuation contributions and PAYG withholding during the year.
What Records Do I Need to Keep?
You should keep:
- Invoices and receipts for purchases and sales
- Bank statements
- Records of wages, super, and tax withheld
- Vehicle and travel records
- Logbooks for home office or motor vehicle deductions
ATO requires you to keep most records for at least 5 years.
Where Can I Get Help with My Business Taxes?
- Registered Tax Agents can help you prepare and lodge your return correctly.
- The ATO’s Small Business Support Hub offers free tools, resources, and advice tailored to business owners.
- You may also consult a business adviser to improve your financial management and identify potential deductions or tax planning strategies.
How Can I Make Next Year’s Tax Time Easier?
- Keep digital records throughout the year, ideally using accounting software.
- Review your finances regularly to stay on top of tax obligations.
- Set calendar reminders for key tax deadlines (BAS, PAYG, super, etc.).
- Engage a tax agent early to avoid the last-minute rush.
- Consider doing a mid-year tax health check with a professional to fix issues before they become costly.
What If I Make a Mistake on My Return?
Mistakes happen — and if you realize you’ve submitted incorrect information, you can lodge an amendment through your myGov account or via your tax agent. The ATO prefers proactive corrections and often waives penalties when errors are honest and fixed promptly.
What Happens If I Don’t Lodge on Time?
If you miss the deadline:
- You may be charged a Failure to Lodge (FTL) penalty.
- Interest may apply to any unpaid tax.
- If you use a registered tax agent, you may be eligible for a later lodgment date.
It’s always better to communicate with the ATO early if you can’t meet a deadline.
Final Thoughts
Understanding your business tax responsibilities is crucial to avoiding penalties and making the most of eligible deductions. By staying organized, keeping good records, and seeking help when needed, tax time doesn’t have to be stressful.
For more support, visit the contact page or talk to a registered tax professional here Free 30 Minutes Tax and Accounting Consultation.