If you’re sharing your business with a partner, why not do the same with your taxes and partner with ITP?
We have more than 10 years experience helping small businesses with their finances. Our professionals are experts at partnership accounting and can help you and your business partner navigate your taxes throughout the year.
Under a partnership, you’ll need to submit a tax return both for your business, and an individual return as a partner of the business. This allows you to separate your business expenses and deductions. Some deductions are not available to the partnership, but may be claimed by the partners.
What You Need
- The partnership lodges a partnership tax return, to report the partnership’s net income (assessable income less allowable expenses and deductions)
- The individual partners each lodge a tax return for individuals.
The partnership doesn’t pay income tax on the income it earns. Instead, you and each of the partners pay tax on the share of net partnership income they receive.
AS AN INDIVIDUAL PARTNER, YOU REPORT ON YOUR INDIVIDUAL TAX RETURN:
- Your share of any partnership net income or loss
- Any other assessable income, such as salary and wages (shown on a payment summary), dividends and rental income.
YOU’LL ALSO NEED TO KEEP RECORDS FOR:
- The names of the new, continuing and retiring partners
- The TFN or address and date of birth of all new partners
- Details of the changes if the persons authorised to act on behalf of the Partnership have changed
- The date of dissolution (if applicable)
- The date of the reconstitution (if applicable)
- Variation of partnership agreement: Keep a copy of any variation to the partnership agreement for the life of the partnership plus five years.
- Business records including: books of account (with accounts for each partner’s capital contribution, drawings and share of profit or loss), minutes of partnership meetings, memoranda of decisions reached, especially regarding shares of income and losses.
DEDUCTIONS & EXPENSES
- A list of work-related expenses (with receipts). This includes business motor vehicle logs
- Interest and fees on investment loans
- Donations to charities (unless you get a ticket to win something in return, those ones don’t count)
- Fee charged for previous year’s tax return
- Income protection insurance
- Sickness and accident insurance
- Superannuation contributions paid as part of the Superannuation Guarantee