PARTNERSHIP TAX
PARTNERSHIP TAX
A partnership is a group or association of people who carry on a business and distribute income or losses between themselves. For example, if you and a friend or family member decide to set up a business together, you might operate it as a partnership. A partnership is relatively inexpensive to set up and operate. The partners share income, losses and control of the business.
In a partnership business structure:
- income, losses and control of the business are shared among the partners
- the partnership has its own TFN and must lodge an annual partnership return showing all income and deductions of the business
- the partnership doesn’t pay income tax on the profit it earns – each partner reports their share of the partnership income in their own tax return
- each partner pays tax on their share of the partnership profit at the individual tax rate and may be eligible for the small business tax offset
- the partnership must apply for an ABN and use it for all business dealings
- the partnership must be registered for GST if its annual GST turnover is $75,000 or more.
WHAT YOU NEED
- the partnership lodges a partnership tax return, to report the partnership’s net income (assessable income less allowable expenses and deductions)
- the individual partners each lodge a tax return for individuals.
AS AN INDIVIDUAL PARTNER, YOU REPORT ON YOUR INDIVIDUAL TAX RETURN:
- your share of any partnership net income or loss
- any other assessable income, such as salary and wages (shown on a payment summary), dividends and rental income.
WHAT YOU NEED CONT...
- The names of the new, continuing and retiring partners
- The TFN or address and date of birth of all new partners
- Details of the changes if the persons authorised to act on behalf of the Partnership have changed
- The date of dissolution (if applicable)
- The date of the reconstitution (if applicable)
- Variation of partnership agreement: Keep a copy of any variation to the partnership agreement for the life of the partnership plus five years.
- Business records including: books of account (with accounts for each partner’s capital contribution, drawings and share of profit or loss), minutes of partnership meetings, memoranda of decisions reached, especially regarding shares of income and losses.
- A list of work-related expenses (with receipts). This includes business motor vehicle logs
- Interest and fees on investment loans
- Donations to charities (unless you get a ticket to win something in return, those ones don’t count)
- Fee charged for previous year’s tax return
- Income protection insurance
- Sickness and accident insurance
- Superannuation contributions paid as part of the Superannuation Guarantee
PARTNERSHIP TAX
Step 2: Determine items recognized directly at the partner level
Step 3: Calculate Taxable income
NEW BUSINESS CLIENTS (BAS + Tax)
GET UP TO 25% DISCOUNT
(CONDITIONS APPLY).
OTHER TAX SERVICES
PERSONAL
Know what you’re entitled to claim, what receipts to keep and how to maximise your individual tax return.
PARTNERSHIP
Know what you’re entitled to claim, what receipts to keep and how to maximise your individual tax return.
CORPORATE TAX
Know what you’re entitled to claim, what receipts to keep and how to maximise your individual tax return.
TRUST
Know what you’re entitled to claim, what receipts to keep and how to maximise your individual tax return.