myTax 2019 Small business income tax offset

You may be entitled to the small business income tax offset if you are a small business entity with a turnover less than $5 million. The maximum offset is $1,000 per year per person from all your sources of small business income.

Essentials

Report your business income in two places

Amounts you enter at the Small business income tax offset question are only used to work out your tax offset. They are not included in your taxable income.

To make sure your taxable income and tax offset are correct, you must report your business income in two places:

• at Business income or losses in the Business/sole trader, partnership and trust income (including loss details) section – these amounts are included in your taxable income. You must also report the following business income/loss at the relevant sections:    
  • foreign business income
  • net farm management deposits or repayments
  • interest and dividend income from carrying on your business
• at Small business income tax offset in the Offsets section – these amounts are only used to work out your tax offset.

Eligible income

Only include income that is eligible for the offset. The offset is worked out on your net income (not gross income), which is your:

• sole trader net small business income (business income after deductions)
• share of partnership or trust net small business income less your deductions relating to that share.

See also

• Sole traders
• Partnership and trust distributions
• Small business income tax offset
• Small business income tax offset calculatorThis link opens in a new window

Income not eligible for this offset

The following types of income are not eligible:

• personal services income (unless from a personal services business)
• salary and wages
• director's fees
• government payments
• interest and dividends (unless related to a business activity).

For more information, see Income and deductions you cannot include.

Completing this section

1. Work out the amounts to enter at this section using the Small business income tax offset calculatorThis link opens in a new window.
   If you want to manually calculate your amounts, see:

• Net small business income (from sole trading activities)
• Partnership share of net small business income less deductions attributable to that share
• Trust share of net small business income less deductions attributable to that share

2. Enter information into the corresponding fields.
3. Select Save and continue when you have complete the Offsets section.