A gift from the ATO: small business income tax offset
It appears the ATO are feeling generous and are currently in a giving mood. Small business owners are about to receive a nice little financial gift by way of an income tax offset. The giving of gifts begins this financial year (2015-16) and will be a welcome surprise for many struggling business owners.
Who’s in line for a presi?
If you run your business as a sole trader, partnership or trust structure and your business is not incorporated, you can expect to receive the tax offset. Your aggregated annual turnover must be less than $10 million (yep, that’s most of us sole traders!).
How much will you get?
Well, essentially not a cent. Huh? I thought you said we’re getting a presi! Yes, you are but you won’t see any physical dollars appearing in your bank (collective *sigh*) but you will receive a tax offset. This means that you will pay less tax which is sort of like receiving a monetary gift but not – get it?
You will get a 8% discount on your taxable income, capped at $1000.
Will I get the offset every year?
Yep – well until we have a change of government and then who knows what will happen but while the Liberals are in, you’ll get this nice little gift every year.
So don’t ever say the ATO is just take, take, take! Sometimes they put their little Santa hats on and shove a few dollars back down our chimneys. This little sole trader for one is very happy about this and hope it’s a sign of further tax relief to come.