What is Income For Tax Purposes

You pay income tax on assessable income you receive, such as salary and wages, most Centrelink payments, investment income from rent, bank interest or dividends, business income; and capital gains from selling assets like shares or property.

Employment income

You must show all employment income, payments and benefits on your tax return, including salary and wages, allowances and other employment income, lump sum payments, reportable fringe benefits and reportable super contributions.

Pensions, annuities and government payments

You must show retirement income and some Australian Government payments on your tax return, including: pensions paid to you as a superannuation income stream, annuities you purchased with a lump sum payment to a life insurance company, the age pension, Newstart allowance, Youth Allowance and Austudy.

Investment income

You must show investment income on your tax return, including your interest, your children’s savings accounts, life insurance bonuses, dividends you are paid as a shareholder, rent and rent-related payments that you receive, or become entitled to and income or credits you receive from any trust investment product.

Capital gains

You must generally show capital gains on your tax return, including gains from selling real estate, shares and managed fund investments.

Income you must declareBusiness, partnership and trust income

You must show business income on your tax return, including: business income, including income you earn as a sole trader, partnership income and trust income.

Foreign income

If you are an Australian resident for tax purposes, you are taxed on your worldwide income, so you must declare any foreign income as well as Australian-source income on your tax return. If you are not an Australian resident for tax purposes, you generally don’t need to declare income you receive from outside Australia in your Australian tax return.

Other income

You must also declare all income from compensation or insurance payments you receive for lost income, discounted shares or rights (including options) to acquire share, and prizes or awards associated with employment or investments, depending on the circumstances.

Amounts not included as income

You may have received amounts that you do not need to include as income on your tax return but that may be used in other calculations on your tax return. The tax treatment of these amounts depends on whether they are classified as: exempt income, non-assessable non-exempt income and other amounts that aren’t taxable.

Warren Kruger

Specialist Tax Consultant - “Helping YOU Pay The Correct Tax And Not A Penny More”. My story starts on Christmas Eve, back in 1983 in South Africa.

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