Business, partnership and trust income
How to declare income you earn as a sole trader, as a partner in a partnership or from a trust in your tax return.
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Income as an individual running a business
If you're an individual running a business (also known as a sole trader), you must declare the income you earn from your business in your own tax return. The net income you receive from carrying on a business is assessable income. Business income also includes cash and other forms of payment for goods or services you supply.
If you lodge:
- online with myTax, this section is available when you select
- You were a sole trader or had business income or losses, partnership or trust distributions (not from a managed fund)
- Business/Sole trader income or loss
- by paper, you will need to complete the business and professional items schedule
You don't need to lodge a separate tax return for your business.
If you’re an artist, blogger, creative or maker you may need to work out if you have a hobby or business. Use our Are you in business? information to work out if money you are getting for creating things is a business or hobby.
Income from a partnership
Partnerships are not a separate taxable entity. A partnership carrying on a business distributes income or losses between the partners. The partnership doesn't pay tax on its income, however you must lodge a partnership tax return to declare:
- the income the partnership earns
- deductible expenses
- the distribution of the net income or loss between the partners.
Each partner in the partnership must also lodge their individual tax return to declare their share of the partnership's net income or loss. This is whether or not they actually receive the income.
For capital gains tax (CGT) purposes, each partner:
- owns a proportion of each CGT asset
- calculates a capital gain or capital loss on their share of each asset.
The individual partners make a capital gain or capital loss from a CGT event, not the partnership itself.
If you lodge:
- online with myTax, this section is available when you select
- You were a sole trader or had business income or losses, partnership or trust distributions (not from a managed fund)
- Partnerships
- by paper, you will need to complete the supplementary tax return
Income from a trust
Like a partnership, a trust is not a separate taxable entity. The trustee must lodge a trust tax return for the trust.
Generally, the beneficiaries of the trust declare their entitlement to the trust's income in their own tax return. Then they pay tax on it, even if they didn't actually receive the income.
You don't however need to declare a trust distribution if family trust distribution tax has already been paid.
If you lodge:
- online with myTax, this section is available when you select
- You were a sole trader or had business income or losses, partnership or trust distributions (not from a managed fund)
- Trusts
- by paper, you will need to complete the supplementary tax return
For more information for businesses and trusts, see Reports and returns
How to declare income you earn as a sole trader, as a partner in a partnership or from a trust in your tax return.