An understatement is that this has certainly been a difficult year, and we are certainly seeing that many businesses have made a tax loss.

A tax loss is when the total deductions you can claim, excluding gifts and donations, are greater than your total income for any income year.

If your business makes a tax loss, you may be able to:

• offset the loss in the same income year against other assessable income, or
• carry forward the loss and claim it as a business deduction in a later financial year.

It is for this reason why it is still important that we attend to your financial statements and/or income tax returns on an accurate & timely basis.

– If you’re a sole trader or in a partnership and want to offset a tax loss, first check if you meet at least one of the non-commercial loss requirements.
– If you do meet the requirements, then you can offset the loss against other assessable income (such as salary or investment income) in the same income year.
– If you don’t meet the requirements, you can defer the loss or carry it forward to future years. For example, you can offset it when you next make a profit.
– If your business is a company, you can generally choose the year you want to claim a deduction.

We at Chan & Naylor SEQ, as tax professionals, will certainly help with the objective of legally maximising the benefits of any tax losses that your business may incur.

Download our Tax & Deductions Guide here to see what you may be eligible to claim