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What is a tax loss, and how can it be turned to good use?
Posted by Team AVS on 24 Aug, 2017 0 CommentsTags: Business, loss carry forward, Revenue loss, tax loss, Taxes
You generally make a tax loss when the total deductions that can be claimed for a financial year exceed the total of assessable and net exempt income for the year.
If you operate a business that makes a loss you can generally carry forward that loss and claim a deduction for it in a future year. If you’re a sole trader or in a partnership, you may be able to claim business losses by offsetting them against your other personal income (such as investment income) in the same income year.
Choosing the right structure for your business is an important decision when setting up a new business. There is no ‘one size fits all’ solution and often, choosing the right structure would depend upon number of factors, for example;
– the type of business you have,
– the number of owners/people involved in business,
– whether you plan to hire employees,
– how much income you expect business to bring,
– how you plan to grow your business in the longer run.
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