Here's how to determine if an amount falls into your gross income so can you work out your tax quickly and accurately
To work out how much tax your company has to pay, you must determine what your gross income is. This can be tricky as there are a lot of components that affect what is and isn't gross income.
But we're here to help you figure out what falls into your company's gross income.
Today we're giving you a checklist of 13 things you must check to determine what falls into your gross income...
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13 things you must check to determine what your company's gross income is
Determine whether an amount falls within your gross income:
1. An amount must be received by or accrued to you before it can be included in your gross income;
2. The amount must have an ascertainable money value;
3. It does not have to be money, it may be a thing or right of action;
4. 'The cash equivalent of the value' of any benefits received by you;
5. You receive the amount on your own behalf for your own benefit;
6. Certain amounts deemed to have been received by you will be included in your gross income;
7. An amount accrues to you once you become entitled to it or if you become unconditionally entitled to it;
8. It must be of a revenue nature;
9. Receipts of a capital nature do not fall within gross income and are thus not taxable;
10. A capital receipt derived from floating or working capital falls in gross income and is possibly taxable;
11. The onus is on you to decide whether any receipt or the onus is on you to decide whether any receipt or accrual is of a capital or revenue nature;
12. You are required to declare all your income, including capital receipts, in your tax return; and
13. Gross income specifically includes other income as provided for in the Act.
Check these 13 things to work out your company's gross income and ensure your tax calculations are correct.
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