Complete this section if you are a small business entity with a turnover less than $5 million. You may be entitled to the small business income tax offset. The maximum offset is $1,000 per year per person from all your sources of small business income.
Things to know
To be eligible, you must:
- be carrying on a small business as a sole trader, or
- have a share of net small business income from a partnership or trust.
Your statement of distribution or advice from the partnership or trustee should include details of your 'Share or net small business income' from each partnership or trust that is a small business entity.
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 – 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 net small business income less your deductions relating to that share
- share of 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
- allowances and 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
To personalise your return to show small business income tax offset, at Personalise return select:
- You are claiming tax offsets, adjustments or a credit for early payment
- Small business income tax offset
To show your superannuation contributions on behalf of your spouse, at Prepare return select' Add/Edit' at the Offsets banner.
At the Small business income tax offset heading:
- Work out the amounts to enter at this section using the Small business income tax offset calculatorThis link opens in a new window.
- Enter information into the corresponding fields.
- Select Save and continue when you have completed the Offsets section.
We will work out your tax offset, using the amounts you entered at:
- 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.