Income Averaging for Special Professionals: Who Qualifies and What You Get
Learn how special professionals like artists and actors can spread their income over five years to manage tax liabilities during high-earning periods.
This scheme allows certain professionals to spread their income over a five-year period to help manage tax obligations.
Who it's for
This is designed for special professionals whose earnings change significantly from year to year, specifically including professional artists, actors, and sportspersons.
What you get
If you qualify, you can spread your income over five years. This helps lower your tax liability during years when you have unusually high earnings compared to your usual income.
What it costs you
There is no direct fee to use this scheme, but it does require very detailed record-keeping to prove your income fluctuations. It is highly recommended that you consult a tax agent who understands the specific needs of the performing arts.
The catch to know
The most important thing to remember is that you must strictly meet the official definition of a "special professional" to be eligible.
How to apply
- Keep detailed records of all your professional income and expenses.
- Consult with a tax professional to ensure you meet the specific requirements.
- Work with your tax agent to calculate how the averaging will apply to your situation.
- Submit your application through the official portal: https://www.ato.gov.au