Assessable income is the total income on which you are required to pay tax. It includes all ordinary income plus any statutory income items specified by tax law.
Assessable income is the starting point for calculating your tax liability. It includes all income from your business activities (sales, services, fees) plus other income items like interest, dividends, rent, royalties and capital gains. The rules for what constitutes assessable income vary by country but generally follow the principle that income from all sources is assessable unless specifically exempted. In Australia, assessable income is divided into ordinary income (income from regular business or employment activities) and statutory income (items specifically included by tax legislation, like capital gains). Your taxable income is then calculated by subtracting all allowable deductions from your assessable income. SortBooks helps by correctly categorising all income sources in Xero and identifying any items that may have special tax treatment.
SortBooks automates the bookkeeping processes related to assessable income by connecting to your Xero account and using AI to categorise transactions, reconcile bank feeds and generate accurate reports. Instead of manually managing assessable income, SortBooks handles it automatically with 97%+ accuracy - saving you hours every week and ensuring your books are always up to date and compliant.
Taxable income is your total assessable income minus all allowable deductions. It is the amount on which your income tax is calculated.
A tax deduction is an expense that reduces your taxable income, therefore reducing the amount of tax you owe. It must be incurred in earning your assessable income.
Revenue (also called sales, income or turnover) is the total amount earned from selling goods or services before any expenses are deducted. It is the top line of the P&L.
Tax compliance means meeting all your obligations to file tax returns, make payments and maintain records as required by your country's tax laws and tax authority.
A tax return is the formal document lodged with your tax authority reporting your income, deductions and tax payable for a specific period, usually annually.
SortBooks handles all the complexity automatically. Just connect Xero and let AI manage your books.