What is Income for Tax Purposes
The most basic rule for determining ‘Assessable Income’ for Tax purposes is this, if it adds to your wealth, no matter how small it is very likely income. The term used in the Tax Act to determine business income is ‘assessable income’ and is summarised as follows:
- All gross income (before tax) from your everyday business activities, including sales made over the internet, income from sales (cash and electronic) and foreign income. Gross income doesn’t include goods and services tax (GST).
- All other business income that is not part of your everyday business activities, including changes in the value of trading stock, capital gains, isolated transactions intended to make a profit, and cash prizes for your business.
Here below, courtesy of the ATO we include links to pages that provide further guidance to taxpayers. Always consult with your Tax Agent if you are unsure of the correct tax treatment for an item or contact email@example.com.
- Cash Income
- Commissions, Investment Earnings, Gratuities and Compensation Payments
- Income Not Part of Everyday Business Activities
- Government Payments
- Capital Gains and Losses
- Income from Online Activities
- Income from The Sharing Economy
- Income from Crowdfunding
- Personal Services Income
- Foreign Income
Date of Issue: 12 June 2020 Author: Noé Vicca
Disclaimer: The contents herein are intended for general information only and should not be construed as legal or accounting advice. Vicca Chartered Accountants Brisbane bears no responsibility for any loss that might occur from reliance on information contained in this publication. Please do not reproduce, transmit or distribute the contents herein in any form without prior permission from Vicca Chartered Accountants, Taxation Accountants Brisbane Australia.