Myth: I only need to lodge a tax return if my business made money

Reality

If you’re running a business, you must lodge a tax return, even if you didn’t earn any income. There’s no minimum income threshold for business returns.

How you lodge depends on your structure:

  • Sole traders: Lodge an individual tax return including both business and personal income.
  • Partnerships: Must lodge a partnership return, but each partner reports their share in their own return.
  • Companies: Lodge a company tax return and pay tax on company income. Directors also lodge individual returns.
  • Trusts: Must lodge a trust tax return under their own TFN.

Individual tax returns can be lodged online with myTax through the ATO’s online services. Using the Australian Government’s Digital ID app, myID, is the most secure way to access the ATO’s online services. Most businesses will need to lodge using Standard Business Reporting enabled software or through a registered tax agent.

Myth: I can claim anything as a business expense

Reality

A common assumption among businesses is that if an expense is paid for using a business bank account or business card, it’s automatically tax deductible. However, the way an expense is paid doesn’t determine whether it can be claimed. The ATO advises that there are 3 'golden rules' to consider when it comes to business deductions.

  1. The expense must be directly related to earning your business income.
  2. If it’s partly private, you can only claim the business portion.
  3. You must have accurate records to prove it.

Common legitimate deductions include:

  • motor vehicle expenses
  • home-based business costs
  • travel expenses
  • digital tools and services
  • employee wages and super contributions.

Remember, you must keep business records for at least five years.

Myth: I don’t need to keep any records – my bill is enough

Reality

Many people assume that having a bill is all the evidence they need to support a deduction.

While your bill shows that you incurred an expense, it doesn’t explain how that expense relates to your business. To claim a deduction, you need records that demonstrate work or business-related use. Records can include data usage summaries, call logs, text message logs, or a diary covering a representative period.

Keeping accurate records helps justify the percentage you’re claiming and can make tax time smoother by reducing the need for follow-up questions later. If you’re a sole trader, you can use the myDeductions tool in the ATO app to keep track of your expenses and receipts throughout the year.

Myth: There’s plenty of time until Payday Super

Reality

A major change is almost here from 1 July 2026, you must:

  • pay super every payday (instead of quarterly)
  • calculate super using ‘qualifying earnings’ (a broader definition than before).

The Small Business Superannuation Clearing House will also be closed so you must switch to an alternative provider before it shuts down permanently on 30 June 2026.

You’ll also need to complete your Single Touch Payroll (STP) finalisation by 14 July 2026 (later for closely held payees), ensuring employees can lodge accurate tax returns.

Myth: I’m on my own when it comes to business tax help

Reality

You don’t have to go it alone and if you’re unsure about what you can claim this tax time, make sure you’re getting your information from trusted sources. Support is readily available:

Getting expert help can save time and reduce costly mistakes.

Myth: Tax time stress is unavoidable

Reality

Tax time can be a busy time for small businesses, and it’s also when misinformation spreads fastest. A little preparation goes a long way and reliable guidance helps cut through misinformation. To make next tax time easier:

  • Stay on top of key financial dates and obligations and maintain good record keeping habits throughout the year.
  • Speak to a business adviser to find areas of improvement when it comes to operating your business.

Learn more