Establish a robust partnership aimed at safeguarding your business interests and effectively managing your tax responsibilities for the long term.

Ensuring that you never pay more taxes or accumulate unnecessary business costs is paramount. In a partnership, the business is evenly divided among all partners, resulting in shared income and losses. While partnerships are relatively straightforward to establish, it's crucial to be aware of associated liabilities and employ strategies to ensure each partner reaps the desired benefits.

Each partner must obtain their own Tax File Number (TFN) and Australian Business Number (ABN). Partnerships can be established through a verbal agreement or a written contract, though it's advisable to have a written agreement to safeguard all parties in the event of disputes or legal issues.

Partners bear responsibility for the business's debts and liabilities and are legally accountable for the actions and obligations of their fellow partners. Unlike corporations, partnerships do not pay tax on their income. Instead, tax obligations are distributed equally among all partners, who pay taxes on their respective shares of the business.

In a partnership, you'll need to file a tax return for the business in addition to an individual return as a partner. This facilitates the separation of business expenses and deductions from personal expenses. While certain deductions may not be available to the partnership, individual partners may still be eligible to claim them.

Choosing the right accountant and bookkeeper for your business can help you maximise your business income. As a member of a business partnership, you’ll need help managing the finances of your business, as well as your taxation obligations.