Income and deductions for small business

Non-commercial loss rules

This information applies only if you operate a business as a sole trader or as an individual partner in a partnership.

Although you are in business, you may have income from other sources. For example, you may have income from salary and wages as well as your business.

If you are a sole trader or a partner in a partnership and you make a net loss from your business activity, you can claim that loss by offsetting it against your other income if you meet certain criteria.

Sections within Working out your allowable deductions

• Non-business or part-year use
• When you can claim an expense
• Claiming expenses you pay in advance
• Expenses you can claim in the income year you incur them
• Expenses you can claim over time
• Expenses you can never claim
• Special deductions
• Tax concessions for primary producers
• Research and development (R&D) tax concessions
• Businesses that run at a loss
• Non-commercial loss rules
• How non-commercial loss rules affect you