Eternity Group

Accounting & tax — Partnerships

Partnership Tax Return Accountant

Australian partnership tax returns and financial statements prepared by a Chartered Accountant and registered tax agent — the partnership return, partner distribution statements, and each partner's share of net income flowing through to their individual returns, handled together.

Book a Partnership Tax ReviewSee Our Process
  • General partnerships
  • Family partnerships
  • Professional partnerships
  • Distribution statements
  • Partnership agreements

Eternity Group Accountants is a registered tax agent (TPB 25523469). Information on this page is general in nature and does not constitute personal tax advice. Before acting, consider whether the information is appropriate to your circumstances and seek advice from a qualified tax professional.

Scope of work

What's included in your partnership tax return.

A clean, defensible partnership return — financial statements, the return itself, a documented allocation of net income and a distribution statement for each partner — prepared as a single piece of work rather than disconnected steps.

Financial statements & the partnership return

P&L · balance sheet · Form 873

Year-end financial statements prepared from your Xero or MYOB file (or trial balance), reconciled against bank, BAS and prior-year accounts, then carried through to the partnership income tax return. Generally a partnership lodges a return but, as a flow-through, pays no income tax itself — its net income or loss is reported and then allocated to the partners.

Allocation of net income or loss to partners

Agreement-driven profit share

Allocation of the partnership's net income or loss to each partner in line with the partnership agreement and its profit-sharing ratios. As a general matter, where there is no written agreement the allocation can default to the position under the relevant partnership law, so we review the agreement and the year's figures rather than assuming a default — the right approach depends on your circumstances.

Drawings, partner salaries & interest on capital

Profit share vs cash drawn

Partner drawings are reconciled against each partner's profit share so cash taken during the year is distinguished from the taxable share. Where the agreement provides for partner salaries or interest on capital, these are generally allocations of partnership profit rather than employee wages, so we treat them according to the agreement and the relevant rules.

Coordination with each partner's individual return

Share flowing through to partners

Each partner's distribution statement is prepared so their share of net income and any credits are ready to flow into their own return — generally each partner is taxed on their share in their individual return. Where a partner is a company or trust, we coordinate that entity's return so the positions across the structure line up.

Suited to

Partnership returns we prepare.

General trading partnerships

Two or more people running an active business together — a trade, retail or services operation. We prepare the partnership financials and return, reconcile drawings against profit share, and issue a distribution statement for each partner so their share carries cleanly into their own return.

Family partnerships

The common arrangement where spouses or family members carry on a business or hold income-producing assets together. We review the partnership agreement and profit-sharing ratios, allocate net income accordingly, and consider each partner's individual position alongside the partnership return.

Professional & practice partnerships

Practices run as partnerships — consultants, allied health, or professional firms with several principals. Partner salaries, interest on capital and varying profit shares under the agreement are reflected in the allocation, with a distribution statement issued for each principal.

Partnerships with a company or trust as a partner

Structures where one or more partners is itself a company or a trust rather than an individual. We allocate each partner entity's share and coordinate its own return, so the trust return or company return reconciles with the partnership's reported income.

Trust tax return

Process

From financials to partner statements — one clear sequence.

A document-driven engagement where you always know what is next, what the fixed fee covers and when lodgement happens. We also coordinate with the rest of your accounting work — see all our accounting services.

Financial statements

Trial balance reviewed, reconciliations confirmed and any open items resolved, then the P&L, balance sheet and notes prepared so the partnership's net income or loss for the year is settled before any allocation work begins.

Profit/loss allocation review

We review the partnership agreement against each partner's position — profit-sharing ratios, partner salaries and interest on capital — and allocate net income or loss accordingly. This is general in nature and depends on your circumstances, so we document the reasoning rather than applying a fixed template.

Lodgement & partner distribution statements

The partnership return is finalised and lodged through the tax-agent portal, and a distribution statement is issued for each partner so their share of net income and any credits flows correctly into their own return.

Frequently asked questions

Partnership tax return — common questions.

Generally, no. A partnership lodges its own income tax return so the Australian Taxation Office can see the partnership's net income or loss, but the partnership is usually treated as a flow-through and does not pay income tax itself. Instead, each partner is generally taxed on their share of the partnership's net income in their own return, whether or not that share has actually been drawn out. How this works in practice depends on your circumstances and the relevant rules, which is why we document the position each year rather than assuming a default outcome.

Related

Where this fits in the bigger picture

A partnership return rarely sits in isolation. Each partner's individual return, any company or trust partner, and forward tax planning across the partners all connect.