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Rebecca81(Newbie)Newbie
26 July 2024

wondering if I can claim expenses associated with setting up as a sole trader even though I have earned no income as yet? I have paid extensive personal tax as an employee and have a registered abn. I have commenced buying items I will need for moving into private practise as a sole trader this year, to avoid trying to find the money when I am reliant solely upon my income as a sole trader.

I have looked on the tax return under profit and loss but it appears you need to place income in order to record the expenses as a loss.

Hoping someone can provide insight as the items I have bought total close to $11,000 so would hate to miss out on claiming them. Thank you.

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Taxduck(Taxicorn)Taxicorn
27 July 2024

General expenses incurred to get ready to start a business are often not deductible because the expense relates to setting up the business rather than costs associated with running the business. Purchasing capital items before your business starts can be claimed through their decline in value (or depreciation). Once an asset over $300 is purchased, installed and ready for use, the cost is depreciated. Once your business is operating then these assets can continue to be claimed through depreciation. Link below provides further information

Tax deductions for depreciating assets and capital expenses | Australian Taxation Office (ato.gov.au)

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Most helpful reply

Taxduck(Taxicorn)Taxicorn
27 July 2024

General expenses incurred to get ready to start a business are often not deductible because the expense relates to setting up the business rather than costs associated with running the business. Purchasing capital items before your business starts can be claimed through their decline in value (or depreciation). Once an asset over $300 is purchased, installed and ready for use, the cost is depreciated. Once your business is operating then these assets can continue to be claimed through depreciation. Link below provides further information

Tax deductions for depreciating assets and capital expenses | Australian Taxation Office (ato.gov.au)

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can i claim expenses if I have earnt no income | ATO Community