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  • myTax 2021 Net income or loss from business

    Complete Net income or loss from business if you derived income or incurred a loss from any business.

    On this page:

    Things to know

    This section covers:

    • income  
      • from being a sole trader
      • under a pay as you go (PAYG) voluntary agreement
      • from which an amount was withheld because you did not quote your Australian business number (ABN)
      • you derived as a foreign resident from which an amount was withheld because it was subject to foreign resident withholding
      • of an independent contractor working under a labour hire arrangement
      • from the following specified payments  
        • payment for tutorial services provided under the Indigenous Student Success Programme (formerly known as the Indigenous Tutorial Assistance Scheme) of the Department of the Prime Minister and Cabinet
        • payment for translation and interpretation services provided for the Translating and Interpreting Service National of the Department of Home Affairs
         
      • as a performing artist in a promotional activity
       
    • income or a loss from a primary production business
    • any other business income.

    Net income or loss from business consists of three sections:

    The income and expenses to be included in Net primary production and Net non-primary production:

    • are amounts derived from your accounting system or financial statements, except for the following which are to be shown at tax values  
      • the values of opening and closing stock, and
      • depreciation expenses for small business entities choosing to use the simplified depreciation rules
       
    • should form part of your profit and loss statement and are the basis for calculating your net profit or loss.
      You should deal with any adjustments to these amounts for tax purposes at Primary production – Business reconciliation items and Non-primary production – Business reconciliation items.

    Video tutorials

    The following video shows you how to complete the business income or losses section in myTax.

    Media: How to complete the business section in myTax
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiubosijw7External Link (Duration: 02:51)

    The following video shows you how to use the Depreciation and capital allowances tool.

    Media: How to use the Depreciation and capital allowance tool
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiuboi7hkiExternal Link (Duration: 03:18)

    Completing this section

    First you will need to complete the:

    To personalise your return to show Net income or loss from business, at Personalise return 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
    • Business income or loss

    To show your Net income or loss from business, at Prepare return select 'Add/Edit' at the Business/sole trader, partnership and trust income (including loss details) banner.

    At the Business income or losses banner, expand the parts that apply to your circumstances to add details.

    Net primary production

    Complete this part if you have business income and expenses from primary production activities.

    You carry on a primary production business if you carry on a business undertaking:

    For further information, see Information for primary producers.

    If you do not carry on a primary production business, go to Net non-primary production.

    You will need the primary production worksheet if you are a primary producer to determine some of the amounts in this section. Complete this worksheet before proceeding.

    1. Select Net primary production to expand the section.

    Primary production – Business income

    1. At Primary production - Business income:  
      • myTax will automatically transfer the following primary production amounts shown in Business income statements and payment summaries, where the income type is 'Business income':  
         
        • ABN not quoted
        • Voluntary agreement
        • Labour hire or other specified payments.
         
      • Enter your total primary production government industry payments received at Assessable government industry payments.
        Add any JobKeeper wage subsidy payments you received including those shown in a reminder below the Business and professional items section.
        For more information, including JobKeeper payment reporting, see Assessable government industry payments and JobKeeper overpayments.
        If you enter an amount at Australian government industry payments, answer the question Does the Assessable government industry payments include fuel tax credits?
      • Enter your other primary production business income or loss amounts at Other business income.
        For more information, see Other business income.
       

    Primary production – Business tax withheld

    myTax will transfer any tax withheld amounts entered in Business income statements and payment summaries and show in the fields:

    • ABN not quoted
    • Voluntary agreement
    • Labour hire or other specified payments.

    Primary production – Business expenses

    1. Enter your primary production business expense amounts into the corresponding fields. For more information, see Expenses.  
      • Closing stock
        If you enter an amount at closing stock, you need to indicate a Closing stock value type.
      • Motor vehicle expenses
        If you enter an amount at motor vehicle expenses, you will need to indicate a Motor vehicle expense type.
      • The Depreciation and capital allowances tool can help you work out any decline in value. It can also work out any deductible balancing adjustment when you stop holding a depreciating asset. Access this tool when you enter your business income or loss details.
        Fields from this tool can't be adjusted in myTax. To make any adjustments, or to add new assets to the tool, select the 'Use the depreciation and capital allowances tool' link.
       

    Primary production – Business reconciliation items

    1. Enter the reconciliation item amounts related to your primary production business activities into the corresponding fields. For more information, see Reconciliation items.

    myTax will:

    • automatically calculate your Total net primary production income or loss from business
    1. Select Save.
      Go to Net non-primary production if you have business income and expenses from non-primary production activities.
      Otherwise, go to Other business and professional items.

    Net non-primary production

    Complete this part if you have business income and expenses from non-primary production activities.

    1. Select Net non-primary production to expand the section.

    Non-primary production – Business income

    1. At Non-primary production - Business income:  
      • myTax will automatically transfer the following non-primary production amounts shown in Business income statements and payment summaries, where the type of income is 'Business income'  
        • ABN not quoted
        • Gross payments subject to foreign resident withholding (excluding capital gains)
        • Voluntary agreement
        • Labour hire or other specified payments.
         
      • Enter your total non-primary production government industry payments received at Assessable government industry payments.
        Add any JobKeeper wage subsidy payments you received including those shown in a reminder below the Business and professional items section.
        For more information, including JobKeeper payment reporting, see Assessable government industry payments and JobKeeper overpayments.
        If you enter an amount at Australian government industry payments, answer the question Does the Assessable government industry payments include fuel tax credits?
      • Enter your other non-primary production business income or loss amounts at Other business income.
        For more information, see Other business income.
        Include payments received that are not personal services income, no tax has been withheld and you have a reminder below the Business and professional items section that you received either  
        • Payments or grants reported in a Taxable payments annual report that relate to non-primary production business activities. Amounts invoiced but not actually paid to you in the financial year were not included in this year's Taxable payments annual report.
        • Business transactions through an electronic payment system and these payments belong to your business activities.
          Work out the amount you need to include at this section. For more information, see Business transactions.
         
       

    Non-primary production – Business tax withheld

    myTax will transfer any tax withheld amounts entered in Business income statements and payment summaries and show in the fields:

    • ABN not quoted
    • Foreign resident withholding (excluding capital gains)
    • Voluntary agreement
    • Labour hire or other specified payments.

    Non-primary production – Business expenses

    1. Enter your non-primary production business expense amounts into the corresponding fields. For more information, see Expenses.  
      • Closing stock
        If you enter an amount at closing stock, you need to indicate a Closing stock value type.
      • Motor vehicle expenses
        If you enter an amount at motor vehicle expenses, you will need to indicate a Motor vehicle expense type.
      • The Depreciation and capital allowances tool can help you work out any decline in value. It can also work out any deductible balancing adjustment when you stop holding a depreciating asset. Access this tool when you enter your business income or loss details.
        Fields from this tool can't be adjusted in myTax. To make any adjustments, or to add new assets to the tool, select the 'Use the depreciation and capital allowances tool' link.
       

    Non-primary production – Business reconciliation items

    1. Enter the reconciliation item amounts related to your non-primary production business activities into the corresponding fields. For more information, see Reconciliation items.

    myTax will:

    • automatically calculate your Total net non-primary production income or loss from business.
    1. To enable us to work out your Income tests amounts, enter the following fields:  
      • Net non-primary production income or loss from a business of investing
      • Net non-primary production income or loss from a rental property business
      • Remaining net non-primary production income or loss from business.
       

    The amounts you enter into the three fields must add up to Total non-primary production net income or loss from business.

    1. Select Save. Go to Other business and professional items.

    Other business and professional items

    Complete this part if you have any business income or expenses.

    1. Select Other business and professional items to expand the section.
    2. Enter your other business and professional items information into the corresponding fields. For more information, see Other business and professional items.
    3. Did you include an amount at Depreciation expenses at PP or NPP?
      No go to Step 11
      Yes due to recent changes, we have provided detailed steps to completing:  
      • Small business entity simplified depreciation
      • Temporary full expensing
      • Backing business investment opt out
      • go to Step 4
       
    4. Are you using simplified depreciation rules?
      For more information, including eligibility, see Simpler depreciation for small business.
      Yes go to Step 5
      No go to Step 6
    5. At Small business entity simplified depreciation, enter amounts into the following fields as required using the Depreciation and capital allowances tool, or amounts you calculated for small business entity depreciation deductions in worksheet 1:    

    The instant asset write-off eligibility criteria and threshold have changed over time. Visit Instant asset write-off for eligible businesses to learn more.

    1. Are you making a choice to opt out of temporary full expensing for some or all of your eligible assets? For more information, see choosing to opt out of temporary full expensing.
      Note: Do not complete this if you are using the simplified depreciation rules.
      Yes go to Step 7
      No go to Step 8
    2. At Temporary full expensing, complete the following fields  
      • Are you making a choice to opt out of temporary full expensing for some or all of your eligible assets? Select one of the following:  
        • A if you are opting out for some of your assets
        • B if you are opting out for all of your assets.
         
      • Number of assets you are opting out for For more information, see Number of assets you are opting out for
      • Value of assets you are opting out for For more information, see Value of assets you are opting out for
      • If you indicated you are opting out for:  
        • some of your assets, go to Step 8
        • all of your assets, go to Step 9
         
       
    3. At Temporary full expensing, enter amounts in the following fields
      Note: Small business entities using simplified depreciation rules cannot opt out of temporary full expensing.  
      • Temporary full expensing deductions For more information, see Temporary full expensing deductions
      • Number of assets you are claiming for For more information, see Number of assets you are claiming for
        Note: This field will display when you enter your deduction amount.
      • If you are:  
        • using the simplified depreciation rules, go to Step 11
        • not using the simplified depreciation rules, go to Step 9
         
       
    4. Are you making a choice to opt out of backing business investment for some or all of your eligible assets? For more information, see choosing to opt out of backing business investment.
      Note: Do not complete this if you are using the simplified depreciation rules.
      Yes go to Step 10
      No go to Step 11
    5. At Backing business investment opt out, complete the following fields  
      • Are you making a choice to opt out of backing business investment for some or all of your eligible assets? Select one of the following:  
        • A if you are opting out for some of your assets
        • B if you are opting out for all of your assets.
         
      • Number of assets you are opting out for For more information, see Number of assets you are opting out for
      • Value of assets you are opting out for For more information, see Value of assets you are opting out for
      • go to Step 11
       
    6. At Other, enter amounts in the fields that apply to your business.  
      • For information on what to show in the required fields, see Other business and professional items.
      • Total salary and wage expenses
        If you enter an amount at total salary and wage expenses, you need to select the code that best describes where the salary and wages have been wholly or predominantly reported. The options are:  
        • C: All included in expense component Cost of sales
        • A: All included in expense component All other expenses
        • B: Included in both Cost of sales and All other expenses
        • O: Included in other than Cost of sales and All other expenses.
         
       
    7. Select Save.
    8. Select Save and continue when you have completed the Business/sole trader, partnership and trust income (including loss details) section.

    Note: If you are a small business entity, you may be entitled to the small business income tax offset. For more information, see Small business income tax offset.

    Closing stock value type

    The options are:

    • C: cost
    • M: market selling price
    • R: replacement value.
    • If this is your first year in business, the value of your Closing stock will be zero. Select Closing stock value type C.

    Motor vehicle expense type

    The options are:

    • S: Cents per kilometre method
    • B: Logbook method
    • N: Motorcycle, taxi, hire car, vehicle over 1 tonne, carry > 9 or more passengers

    If you have more than one code, select the code that applies to the largest claim.

      Last modified: 01 Jun 2021QC 65554