ENTREPRENEUR’S TAX OFFSET

 

The sole trader or PSI taxpayer, or business structure, must be in the STS.

 

Note that some taxpayers who only have PSI qualify for the entrepreneur’s tax offset, provided that the PSI qualifies the taxpayer to enter the STS.

 

The offset can apply to a taxpayer who has an interest in a partnership, trust business or company, as well as to sole trader businesses.

 

In the case of a partnership, the final distribution income at item 12 is taken as the net STS income for that partner. Note that in order to get the offset the taxpayer does not have to be in the STS, but the partnership does.

 

To qualify for the offset for a partnership business:

 

Partnership in STS	Taxpayer in STS	YES
Partnership in STS	Taxpayer not in STS	YES
Partnership not in STS	Taxpayer in STS	NO

 

The same principles apply for trust business structures.

 

REFERENCES

 

ATP 37.015

 

ENTREPRENEURS’ TAX OFFSET		AMOUNT
TAXABLE INCOME	A	32051
BASIC TAX (exclude Medicare)	B	4965.30
BASIC TAX x 25%	C	1241.33
ITEM 13 & 14 NET INCOME or ITEM 12 NET INCOME FOR PARTNER	D	32051
STS % = 100 x D/A (2 decimal places)	E	100%
STS GROSS INCOME up to $50,000
ENTREPRENEUR’S TAX OFFSET: C x E	F	1241.33
STS GROSS INCOME $50,001 - $74,999
STS PHASE-OUT FRACTION: (75,000 - STS gross income) / 25,000	G	0.3187
ENTREPRENEUR’S TAX OFFSET: F x G		395.85
STS GROSS INCOME $75,000 or more
No entrepreneur’s tax offset available.