# ATO: Has your small business made a tax loss this year?



## Jack Malarkey (Jan 11, 2016)

From the Australian Taxation Office's small business newsroom:

https://www.ato.gov.au/Newsroom/smallbusiness/General/Has-your-business-made-a-tax-loss-this-year-/
*Has your business made a tax loss this year?*










*11 August 2020*

This has been a difficult year, and your business may 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 an 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 year.
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 losses 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.

Remember, registered tax agents and BAS agents can help you with your tax.

*Watch:

[Use the link above to watch this vide.]

Find out about:*


Business losses
Non-commercial losses


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## Jack Malarkey (Jan 11, 2016)

Rideshare drivers need to consider the possible application of the non-commercial losses rules if they (as an individual) want to deduct a rideshare loss from other income in the current year.

Quarantining of losses under the non-commercial losses rules doesn't apply if you have assessable income of at least $20,000.

When calculating assessable income, don't subtract expenses.

Jobkeeper payments received as a business participant count towards the $20,000 as you include these payments as part of your business income:

https://www.ato.gov.au/Newsroom/smallbusiness/General/Is-it-income-/
Australian Taxation Office:

*Assessable income test*

_'To pass the assessable income test, assessable income from your business activity during the financial year must be at least $20,000.

'Assessable income includes:_


_ordinary income - for example, the gross earnings (excluding GST) of a business activity, and_
_statutory income - for example, capital gains._
_'If you pass the assessable income test, you can claim your losses in the current year.

'Any income normally included as assessable income from the sale of depreciating assets in the normal course of business is included in assessable income for this test. This also applies for capital gains and fuel tax credits.

*'Part year trading*

'If you were in business for less than a year, or you stopped carrying on your business activity during the year, you can make a reasonable estimate of what your assessable income would have been for that full year. If that amount is greater than $20,000 then you are considered to have met the assessable income test.'_

https://www.ato.gov.au/business/non-commercial-losses/four-tests/#Assessableincometest


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## Cil (Dec 27, 2018)

Thanks Jack 🙏


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## Jack Malarkey (Jan 11, 2016)

Jack Malarkey said:


> Quarantining of losses under the non-commercial losses rules doesn't apply if you have assessable income of at least $20,000.


Just to clarify: when I say 'assessable income of at least $20,000', I mean 'assessable income* from your business activity* of at least $20,000'.


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