Video and transcript
Media: Did you know you can claim a business loss as a deduction?
External Link (Duration: 01:10)
If this financial year is the first time your business has made a loss, you may not know that you can usually claim a deduction for it.
Your business structure can affect how you claim a tax loss. For example, if you're a sole trader or in a partnership and you meet the requirements, you can offset your loss against other assessable income in the same income year.
If you don't meet any of the requirements, you can defer the loss or carry it forward to the next year you make a profit and offset the loss then. If your business is a company, you can generally choose what year you want to claim a deduction for a carried forward tax loss.
There are some deductions you can't use to create or increase a tax loss, including donations and personal superannuation contributions.
To find out more, visit ato.gov.au/businesslosses or speak with a registered tax agent.Australian Taxation Office Assistant Commissioner Andrew Watson discusses business lossesAustralian Taxation Office Assistant Commissioner Andrew Watson discusses business losses