ATO Income Averaging – What is it and can you benefit?

Surprisingly, the ATO isn’t always on your case! In fact, if you fall into a specific category, you might be eligible for the Special Professional Income Averaging rules—essentially a unique tax benefit designed for certain professionals.

The ATO recognizes four categories of special professionals:

• Authors and inventors
• Performing artists
• Production associates
• Sportspersons

Yes, that even includes the likes of Instagram or TikTok influencers and bloggers who fit the performing artist category may be eligible!

So, what does this mean for you? As an example, for those in the performing arts or sports, income can fluctuate wildly from year to year. One year might be packed with lucrative brand deals and contracts, while the next could be much quieter.

The income averaging rules allow you to spread your tax obligations evenly over a five-year period. This can smooth out the highs and lows of your income, making your tax situation more manageable.

Navigating income averaging on your tax return can be a bit complex. If you think you might qualify or have questions about how it works, don’t hesitate to get in touch with our team today for expert assistance.