Using Business Losses To Offset Income From Other Sources
Many Australian businesses have fallen on tough times in the current economic climate. If your business has made a loss in the last financial year you may be able to at least use it to offset income from other sources. If you are running a small business you may be wondering if you can deduct some of the expenses of running your business against any income from other sources.
The ATO will allow you to deduct business losses against taxable income from other sources provided you meet some criteria that relate to the income and assets of the business. Income must be less than $250,000 but at least $20,000. The business needs to have had a profit in the three out of of the past five years. In addition the value of real property used for business purposes needs to have been at least $500,000 and the value of assets excluding property and cars used for running the business needs to have been at least $100,000.