There are rules to do with sole traders and businesses and limits to whether they can claim any losses against other income as well.
Why? Well, individuals have in the past often thought up a myriad of ideas to make money – some more conventional than others. There is the:
- plumber earning their keep
- electrician out and about
- constructor and bricklayer working for themselves
- computer and IT consultant helping multiple businesses
- artist painting and selling their art
- musician playing gigs
- farmer in a partnership losing money during bad years and making up in the good ones
- mum and dad invested in a scheme that grows almonds and cattle with endless losses
- hobby farmer who farms on the weekend, loses money on the whole thing always seems to get some tax benefits so is happy
- horse breeder hoping to strike it rich but continually losing money
I hope you can see the natural and logical progression. From generally accepted business ventures, to unusual and far reaching schemes. As far as tax goes, you can also see the risk spectrum of what the ATO would be happy to see and what they would like to have a look at more closely.
Contact us to discuss your personal business, the possible tax risks and the tax solutions we can help you with.
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