You can reduce the tax you pay by up to $1,000 each year by making the most of the small business income tax offset.
It is worked out based on the proportion of tax payable on your business income and is 8% for the 2016-2017 income year onwards.
(Even better news, the offset is set to increase to 10% in 2024-2025 and by 3% increments in the following two years.)
Are You Eligible?
You must be a sole trader or have a share of net small business income from a partnership or trust.
The small business needs to have a turnover of less than $5 million this financial year.
The ATO will work out your offset based on the amounts in your income tax return. They will base this on:
- Net small business income earned as a sole trader
- Share of the net small business income from a partnership or trust
Alex is the co-founder and CEO of Valiant Finance. He brings a wealth of experience from his time as a banking consultant at McKinsey, and has a background in Business and Law.