If you’re running a business, most income you receive is assessable for income tax purposes. The total amount is referred to as ‘assessable income’.
You need to report assessable income in your tax return. It includes:
-
cash income and income from online transactions
-
commissions and investment earnings
-
recovered bad debts for which you’ve previously claimed a tax deduction
-
most government payments
-
capital gains and losses
-
increases in the value of your trading stock
-
stock taken for personal use
-
payments from an insurance claim related to your business.
Make sure to also check what income you can exclude – for example, some COVID-19 government payments aren’t assessable if you meet the eligibility criteria.
Remember you can reduce your business’s taxable income by claiming business tax deductions, as long as:
-
the expense directly relates to earning your business’s assessable income
-
you only claim the business-use portion if the expense is for a mix of business and private use
-
you have records to substantiate your claims.
Expenses may include:
-
motor vehicle and travel expenses
-
items related to protecting staff from COVID-19
-
employee super contributions
-
payments you make to workers (including their wages) as long as you’ve complied with the pay as you go withholding and reporting obligations for each payment.
If you haven’t already, check out the ATO’s support for small businesses and small business tax time toolkit for more links to information and fact sheets.
Remember, we’re here to help, so please contact us today on 0417 606 279 if you need assistance.
Source: ato.gov.au
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/Newsroom/smallbusiness/General/Business-income-and-expenses/.
Important:
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.
