A Partnership Tax Return is a special kind of tax report that every business partnership in Australia must submit each year to the Australian Taxation Office. It is an important form that lists all the money the business has earned and spent during the year and shows how the income was shared between the partners. It helps the government understand how much profit was generated and how it was distributed among all parties involved.
Although the partnership as a whole does not pay any income tax directly, this report remains important because it indicates how much each partner needs to include in their individual income tax return. This helps ensure that everyone pays the correct amount of tax fairly.
When a business is run by two or more people who work together and share both profits and responsibilities, every partner should ensure the Partnership Tax Return Form is filled out correctly and lodged before the deadline. Doing so helps avoid issues with ATO and keeps business records in order.
How To Lodge a Partnership Tax Return Online?
Every business operating as a partnership must file a Partnership Tax Return each year, even if it hasn’t made a profit. It is not a choice but a legal rule set by the government.
The ATO partnership tax return must include every part of the partnership’s income, such as sales, service charges, and rental income. It must also show all the expenses that the business paid during the year, such as supplies, wages, or rent for business space. The return also explains how the total profit or loss was divided between partners according to their written agreement.
When the Australian Taxation Office receives this report, it checks the information with each partner’s personal return to make sure everything is correct and matches properly.
What Is New For The 2025 Partnership Tax Return?
Every year, the Australian government updates tax laws, and 2025 is no different. The ATO might change how income, expenses, or deductions need to be reported. Partnerships should pay close attention to these updates as they could impact how capital gains or other earnings are reported.
For example, there might be updates about small business tax concessions, new GST reporting methods, or changes to PAYG obligations. The best way to stay informed is to visit the Australian Taxation Office website and check for any new rules before preparing your return. This step helps to avoid using old information or missing new deductions that help lower your taxable income.
Important Lodgement Details For 2025
The due date for lodging the Partnership Tax Return for the 2025 year is 31 October 2025. If the partnership uses a registered tax agent, the date might be different depending on the agent’s lodgement schedule.
There are two main ways to lodge a tax return:
- Lodging online through ATO Online Services or approved tax software.
- Submit a paper form using the official Partnership Tax Return Form (NAT 0659).
Before sending the return, all partners must check and sign the form to confirm that the details are true and correct. This is very important because every partner shares responsibility for the information that is sent to the ATO.
How To Lodge A Partnership Tax Return Online?
Lodging your Partnership Tax Return online is often quicker and more secure than posting it by mail. To do this, the partnership must have an active Australian Business Number (ABN) and be registered for online services.
Here are the simple steps to follow:
- Log in to ATO Online Services for Business.
- Select the option to start a new Partnership Tax Return.
- Enter all income, expenses, and details of profit sharing between partners.
- Review all figures carefully before submitting the return.
- Save a copy of the confirmation for your business records.
When lodging online, make sure the financial statements match the numbers in the return. Keeping the information consistent helps avoid a review or audit from the Australian Taxation Office:
5 Simple Steps of Partnership Tax Return online
Schedules And Worksheets You May Need
Depending on the type of work the partnership does, there may be extra schedules to include with the return. Some of the most common ones are:
- Capital Gains Schedule for assets that were sold during the year.
- Rental Property Schedule if the partnership owns rental properties.
- Business and Professional Items Schedule for Reporting Business Income and Deductions.
It is helpful to use ATO worksheets when calculating total income, deductions, and each partner’s share of profit or loss. These worksheets help you keep your figures accurate and organized in case the ATO requests them later.
Partnership Tax Deductions You Should Know
The Australian Taxation Office allows partnerships to claim deductions for most normal business expenses. This means the partnership reports the money spent on things that helped the business earn income during the year.
Some common partnership tax deductions include:
- Rent, electricity, and water bills for business use.
- Employee wages and superannuation.
- Office tools, stationery, and computer equipment.
- Advertising, promotion, and marketing costs.
- Vehicle and travel expenses for business work.
It is important to keep receipts, invoices, and financial records for at least five years. These papers help if the ATO decides to check your deductions later.
Common Mistakes To Avoid When You Lodge A Tax Return
Many partnerships make mistakes when they lodge their income tax return, and these mistakes can cause delays or even lead to penalties. The Australian Taxation Office often lists the most common errors.
Some of these include:
- Forgetting to include required schedules.
- Using incorrect amounts when splitting profit or loss.
- Not including GST or PAYG obligations correctly.
- Sending figures that do not match business accounts.
Before you submit the return, go through everything one more time. Check that all figures are correct, all forms are attached, and every partner’s details are accurate.
ATO Guidance And Support For Partnerships
The Australian Taxation Office offers helpful tools, examples, and guides for partnerships to make the lodgement process easier. The appendices in the tax form provide step-by-step instructions on how to fill out certain labels, apply depreciation, and manage different kinds of income.
If you are not sure about something, it is always a good idea to visit the ATO website or ask a registered tax agent. The goal is to ensure all figures are supported and correct so that the return is processed quickly and without issues.
Why Lodging A Partnership Tax Return Matters?
Submitting a Partnership Tax Return is not only a legal rule but also a key step in keeping your business records clear and honest. It helps make sure that each partner’s income is reported correctly and builds trust with banks, clients, and government departments.
If the return is not lodged on time, the partnership might face late fees, interest charges, or other penalties. Staying organized and following ATO rules helps keep your business running smoothly and safely.
In case you feel the burden of doing your taxes on your own, professional assistance will not only save you time and avoid expensive mistakes. The professionals at Wollongong Tax Services can offer effective advice to individuals and companies, keeping them part with the tax, and enabling them to make secure financial judgments. Making a quick consultation appointment would help you with your tax issues and have things sorted with clarity and peace of mind.
FAQs
What Is An Annual Partnership Tax Return?
It is a form that shows the income, expenses, and profit or loss of the partnership. The ATO uses it to check how much income each partner should report on their personal return.
How Do You Lodge A Partnership Tax Return Online?
You can lodge it through ATO Online Services for Business by entering income, deductions, and partner details and then submitting the completed form.
Does The Partnership Itself Pay Income Tax?
No, the partnership does not pay tax directly. The profits and losses are divided between partners, and each person includes their share in their personal income tax return.
