Income tax, CGT and entities

Taxable income

Taxable income is the amount on which income tax is calculated. It is assessable income, which includes ordinary income and statutory income, less allowable deductions. The Income Tax Assessment Act 1997 sets out what counts as income and what can be deducted. The result usually differs from the accounting profit in the financial statements, because some amounts are treated differently for tax, such as depreciation, entertainment, non-deductible expenses and timing differences. Reconciling accounting profit to taxable income is therefore a core part of preparing a return, and the reconciliation is kept as a working paper so the adjustments can be explained.

General information, not tax advice. The rules change, so check the source page above for the current position. Fedix is developed by Tax7 R&D Pty Ltd.