Generally, you make a tax loss when your business expenses are more than your income.
If you make a tax loss, you may be able to:
- claim it in the current year
- carry it forward, or
- carry it back.
Before you claim a tax loss, check that you have correctly:
- accounted for all your business income
- claimed expenses such as cost of goods sold, motor vehicle and ‘all other’ expenses
- apportioned expenses that have been a mix of business and private use
- applied your loss to the correct year.
Notes:
- A capital loss is different to a tax loss ̶ it can only be offset against future capital gains but not against income.
- If you’re claiming a tax loss from a previous year and your business is a company, you may need to meet requirements such as the ‘similar business test’.
- Accurate and up-to-date records will help you better calculate income and expenses.
Need more help on claiming tax loss?
Contact us for a discussion today.
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