Increasingly, being in business is more than having a bricks and mortar store or plying your trade. Business income is income you earn selling goods or services through digital websites, apps or even personal ads. Remember, if you earn top up income, have a side hustle or have built your hobby into a business then you need to declare this income.

Business income can also come in many shapes and sizes. It can be cash or other forms of payment you receive in exchange for your goods or services. This includes clothing, jewellery, flights, vouchers or crypto assets.

If you’ve received these, or any other non-cash benefits instead of money for your goods or services, you need to record them as income at their market value on your tax return.

This means, you record the cash price that you would normally have to pay for them.

You may be able to reduce the assessable amount of a non-cash benefit you’ve received, by claiming the amount you would have been able to as a deduction. For example, if you purchased the item for business purposes.

Remember, it’s important to report your regular forms of income, such as:

• cash and digital payments
• vouchers or coupons
• business investments
• online and overseas business activities
• services you provide using your personal effort and skills (Personal services income)
• the sharing economy, such as ride-sourcing
• assessable government grants and payments
• the value of trading stock you take for your own use
• payments from insurance claims.

There are some payments that aren’t assessable income, so you don’t need to include them on your tax return, such as:

• non-assessable non-exempt (NANE) government grants
• bona fide gifts or inheritance
• GST you’ve collected.

Knowing what records you need to keep is also important. You need to keep most records for 5 years, so you should store them in a safe place. They should also be written in English or be easily converted to English.

For further information, check out our a self-paced course on good record keeping – Essentials to strengthen your small business – Record keeping

If you still have questions about business income, our registered tax professional can help you.