Suitable for: Anyone who is unsure on how to treat income and expenses in their BAS or income tax return
Tax Difficulty: Beginner
Airtax Experience: Anyone
Time to read: 2-4 minutes
How to treat your income and expenses in both BAS and income tax returns
Should I put income and expenses in both my BAS and income tax return?
In general, yes, you should include business expenses in both your BAS and your income tax return, but please note the following:
If you are GST registered and complete a BAS
You should put your income and expenses into your BAS inclusive of GST (this is called gross).
But, you should put your income and expense into your income tax return exclusive of GST (this is called net).
So, for example, if you receive $11,000 income gross (made up of $10,000 + $1000 GST) and you have $3,300 expenses gross (made up of $3000 + $300 GST).
In your BAS, you would enter: |
In your income tax return, you would enter: |
|
Income $11,000 Expenses $3300 |
Income $10,000 Expenses $3,000 |
If you don't complete a BAS
You should put your income and expenses into your BAS inclusive of GST (this is called gross).
How come I can claim the expenses twice (i.e. in my BAS and in my income tax return)?
The two are different types of tax and serve different purposes, so you are not double-claiming when you enter your expenses in both your BAS and income tax return; you're just recording the information on different tax statements.
Your BAS is to reconcile your GST collected on behalf of the government vs the GST you've paid. Whereas your income tax return is to work out how much tax to pay on your income based on profit/loss for the year.
Start your BAS with Airtax today:
- Log in or sign up to Airtax
- Complete your BAS using our easy BAS form
- Alternatively, you can book a Business Assist call to speak with one of our specialists who can help you lodge your BAS confidently
