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Small business tax losses

The ATO has recently announced that is going to launch a crack down on small to medium businesses that have incurred and reported tax losses as a direct result of the global financial crisis. Businesses with carried forward losses in their 2009 income tax returns may shortly receive a letter from the ATO requesting further information and verification of the losses reported. Note that where your company/business losses are genuine there will be no issues for you.

However, where possible changes have occurred in ownership of the business and/or the type of business being operated has changed significantly, then the losses may not be able to be utilised in your business, depending on your specific circumstances. Once again, the complex nature of carried forward losses highlights the need for a an accountant for small business that is up to date both with your affairs and the current tax laws.

If you feel that these issues may apply to your current situation, then make sure you spend the time with your local small business accountant to ensure that both your accountant and yourself are across these issues.