Tax Deduction Tips For Education Business Owners

As an education business owner, you are eligible to claim certain tax deductions. Knowing what these deductions are and what kind of claims you can make has the potential to reduce the amount of tax you’re required to pay. The key to being able to claim certain deductions is to document everything and to always track your spending. Keep hold of all receipts, invoices and credit card statements, no matter how insignificant a purchase may seem. Don’t pay more taxes than you need to be paying – when you’re a small business owner, every cent counts! Here are some essential tax deduction tips if you’re a small business owner.

  1. Home Office/Occupancy Deductions

If you work from home or have a home office that you use for business purposes then you may be able to claim expenses such as rent, mortgage, phone, internet and electricity. You can still be eligible for this even if you work in another location provided that you still use your home office to conduct business activities. However, you must satisfy certain conditions to claim occupancy expenses. For example, the space you use for business activities must be clearly identifiable as a place of business – this means your ‘home office’ can’t just be your bedroom and your laptop. The space has to be regularly and exclusively used for business. To ascertain the running expenses you can claim (such as utilities or cleaning fees), you can determine the size of the home office in comparison to the rest of the house or look at the bills before and after you had the home office.

  1. Motor Vehicle Deductions

You can also claim the expenses for owning and running a motor vehicle for your business, even if it is also your personal vehicle. The type of deductions you’re entitled depend on your business, the car and how often it is used for personal reasons. However, if you use the car to visit clients, purchase equipment, go to the accountant or drive to other work sites then you can generally claim a deduction. Make sure to retain all the necessary records and to figure out how much time or how often you’re using the vehicle for business reasons.

  1. Bad Debtors

If you’re a small business, chances are you’ve probably had the unfortunate experience of dealing with clients who don’t pay their invoices. If you know that it’s most likely you won’t recover the debt then you can write it off and claim it as a deduction. Writing off bad debt prevents it from becoming part of your taxable income, meaning that you would be required to pay tax on the amount that hasn’t be paid.

  1. Start-Up Costs

New businesses are entitled to a deduction in the business’ first year for expenses that relate to setting up the business. This can include such things as exploring business opportunities, analysing markets, advertising before the business opened and the costs of training staff. This also relates to any organisational expenses you may have had, such as legal and accounting fees. However, you can usually only deduct up to a certain amount depending on the nature of the business.

  1. Networking Expenses

For many small business owners, a portion of your expenses probably goes towards networking, this could mean attending education based events. This might be in the form of business gifts, attending trade shows, conferences or other events and subscriptions or fees to certain associations and organisations. These networking-related expenses can be claimed, as can events or days that qualify as learning development to improve your skills in your profession.

  1. Business Travel

As a business owner, you can also be eligible for deductions for travel expenses that incurred for business reasons. The best way to ensure you can claim on these is to keep a record of everything from the airline tickets, to the accommodation, to other miscellaneous expenses. If it’s a longer trip, make sure to record the reason for the business activity each day to show that the entire trip was for business reasons.

  1. Interest On Loans

Interest can be deducted from any money that your business borrows such as business loans. That means any interest accrued on a business loan but not yet paid by the end of the financial year can potentially be deductible. Another thing to consider is if you as a business owner use your personal credit card or a personal loan to fund your business so the interest costs are incurred by you, you can claim a deduction of the interest when doing your personal taxes.


Bio: Emily is a senior content writer with She is a recent University graduate and enjoys writing about educational and career orientated topics.