Tax-deductible COVID-19 losses
2020 has been a tough year for many businesses. Many profitable businesses are making a loss for the first time due to the COVID-19 restrictions. If you find yourself in that position with your business, you may be able to claim a tax deduction for your loss.
There are two potential ways you can do it:
offset the loss in a future financial year when you start making a profit again. Sole traders, partnerships and companies can all do this.
Whatever method you use, you’ll pay less (or no) tax in the financial year you make your claim for a business loss.
It’s important that you keep records of your tax-deductible loss for at least five years and always check with your Tax Agent.
If worse comes to worst and you’re forced to close your business doors permanently, you still have to lodge your final business activity statement (BAS) as part of the winding-up process. This will ensure you have complied with all your tax obligations. You should also cancel your ABN and GST registration if you decide to wind up your business.
How we can help
At Scorpion Bookkeeping, we can help you to keep all your financial records up to date so you can claim any tax-deductible loss you may make. We currently have a diverse range of clients in South Australia, Victoria and New South Wales.
We can also help you to implement Xero software to help you with your bookkeeping and provide you with ongoing bookkeeping support services. We are a Xero-certified partner.
Contact us today for a free, no-obligation consultation to find out how we can help your business!