Partnership Tax Return Accountant

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.

As a general guide, the engagement typically covers preparation of the partnership financial statements (P&L and balance sheet), the partnership income tax return, a review of how net income or loss is allocated under the partnership agreement, and a distribution statement for each partner showing their share of income and any credits. The exact scope depends on your situation — the number of partners, the condition of the bookkeeping and whether financial statements are prepared from scratch — and a fixed fee covering that scope is quoted in writing before work starts.

In general terms, the partnership's net income or loss is allocated to the partners according to the partnership agreement — the document that sets out each partner's profit-sharing ratio and any prior entitlements such as partner salaries or interest on capital. Where there is no written agreement, the allocation may default to the position under the relevant partnership law, which is not always what the partners intended. We review the agreement and the year's figures together so the allocation reflects what was actually agreed, with the treatment depending on your circumstances.

A partner does not have to be an individual — generally a company or a trust can be a partner in a partnership, and this is common in family and business structures. Where that is the case, each partner entity still receives its share of the partnership's net income, which then flows into that entity's own return: a company partner into its company return, a trust partner into its trust return and distribution resolution. Coordinating these together keeps the positions consistent across the group, and the right approach depends on your circumstances and the relevant rules.

Yes. Where the partners are individuals, we can prepare their individual returns in the same engagement, carrying each partner's share of partnership net income, any partner salary and other income through from the partnership distribution statement. Handling the partnership return and the partners' returns together means the figures reconcile and there are no gaps between what the partnership reports and what each partner declares.

In general terms, a partnership is a flow-through, so a partnership loss is usually allocated to the partners under the agreement rather than trapped in the partnership. Whether a partner can actually use their share against other income can depend on further rules — for example the non-commercial loss rules that can apply to individuals. So a loss being allocated to a partner does not automatically mean it is deductible in that year. Whether and how a loss can be claimed depends on the circumstances and the relevant rules, which we review as part of the return.

Fees depend on the partnership's complexity — the number of partners, whether any partner is a company or trust, the condition of the bookkeeping, and whether financial statements need to be prepared from scratch. We quote a fixed fee in writing, scoped to your situation, after a short scoping call. There is no standard dollar figure because every partnership differs.