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 small business tax time toolkit for more links to information and fact sheets.
Remember, registered tax agents like the team at Paris Financial can help you with your tax! Feel free to contact our office to discuss further: (03) 8393 1000.
Source: ATO Newsroom
