7 tax time tips for businesses in 2026

Tax time is here, and while it may not be the most exciting time of year, getting your business tax affairs in order can save you time, money and unnecessary headaches.

The Australian Taxation Office (ATO) is reminding businesses to get the basics right, with a continued focus on accurate record-keeping, correctly claiming deductions, reporting all income and separating business and private expenses.

With increasingly sophisticated data-matching technology, the ATO says businesses are more likely than ever to be picked up if something doesn't add up.

Here are seven key things every business should know this tax time.

The $20,000 instant asset write-off remains available for eligible small businesses with an aggregated turnover of less than $10 million.

Eligible assets such as tools, pumps, generators and other equipment costing less than $20,000 can generally be claimed immediately, provided they were first used or installed ready for use by 30 June 2026.

Assets above the threshold generally need to be depreciated over time under the simplified depreciation rules.

The Federal Government has also announced its intention to make the instant asset write-off permanent from July 1, 2026, providing greater certainty for small businesses planning future equipment purchases.

Good record-keeping remains one of the simplest ways to avoid problems at tax time.

The ATO recommends businesses keep invoices, receipts, bank records and other supporting documents throughout the year rather than scrambling to find paperwork at tax time.

Using accounting software and storing records digitally not only makes tax time easier but also helps businesses manage cash flow, invoicing and day-to-day operations more effectively.

If the ATO reviews your claims, having complete records readily available can make the process significantly smoother.

It sounds obvious, but failing to report all income remains one of the most common mistakes businesses make.

Remember to include all business income, including cash payments, online sales, bank interest and barter arrangements where applicable.

The ATO now receives information from a wide range of third parties, including financial institutions, employers, payment providers and government agencies, allowing it to cross-check information against tax returns.

Trying to leave income off your return is far more likely to be detected than it was even a few years ago.

Before claiming any deduction, remember the ATO's three golden rules.

You can generally only claim an expense if:

These principles apply whether you're claiming machinery running costs, fuel, repairs, tools, protective equipment or office expenses. Getting the basics right can help reduce the risk of mistakes and make it easier to support your claims if asked.

If your business owes money to the ATO, don't ignore it.

The ATO encourages businesses experiencing financial difficulties to get in touch early and arrange a payment plan rather than allowing debts to accumulate.

It's also worth remembering that interest charged by the ATO on overdue tax debts is generally no longer tax deductible, making unpaid tax debts even more costly than before.

If your business operates through a trust, make sure your trust distribution resolutions were completed by 30 June 2026 and that all supporting documentation is in order.

Trustees generally need to document beneficiary entitlements before the end of the financial year, and failing to do so can have significant tax consequences, including the trustee being assessed on the trust's taxable income.

If you're unsure whether your trust complied with the requirements, speak with your accountant or registered tax adviser as soon as possible.

Vehicles and machinery, including utes, tractors, loaders and other equipment, are often used for a mix of business and private purposes.

Make sure any deductions reflect the actual business use of the asset rather than claiming the full amount automatically. Keeping vehicle logbooks, machinery usage records and maintenance receipts can help substantiate your claims if the ATO asks questions.

If company-owned vehicles or other assets are made available for private use, Fringe Benefits Tax (FBT) obligations may also apply.

Tax legislation changes regularly, and every business has different circumstances.

If you're unsure what you can claim or how the rules apply to your business, speak with a registered tax agent or accountant. They can help ensure you're claiming everything you're entitled to while avoiding costly mistakes.

If you discover an error after lodging your return, it's generally better to voluntarily correct it as soon as possible rather than waiting for the ATO to identify the issue.

For more information, visit the ATO website or speak with a registered tax agent.

Note: This article is general information only and does not constitute financial or taxation advice. Businesses should seek advice from a registered tax agent or accountant based on their individual circumstances.