Running your own show comes with freedoms but also tax obligations. The ATO recently published tips to help sole traders get ready for tax time without stress. Here’s a simple guide to make sure you’re doing things right.
Key Tips & Common Mistakes
These are areas where sole traders often slip up. Doing them well can save you time, headaches, or even penalties.
- Report All Your Income
Make sure you declare everything you earn from your business. That’s all invoices, cash jobs, and odd jobs. The ATO keeps an eye on records, bank data, etc. Leaving things out can lead to trouble. (Australian Taxation Office) - Know What You Can Deduct (Claim) as Business Expenses
Only expenses that are genuinely for business purposes are deductible. Things like tools, equipment, business phone/internet, stationery, etc. But if something is partly personal, you need to apportion properly. (Australian Taxation Office) - Keep Good Records
Save your receipts, invoices, bank statements, logs (for work-related travel or vehicle use), etc. Organise them during the year (don’t wait until the last minute). Accurate records make it much easier and reduce risk if ATO asks questions. (Australian Taxation Office) - Use the ATO App and Tools
The ATO offers tools and apps to help track your business income, monitor what you owe, find what deductions you can claim, etc. Using these can make tax time smoother. (Australian Taxation Office) - GST Registration If You Cross the Threshold
If your turnover passes the threshold (the amount that the ATO sets), you’ll need to register for GST, lodge Business Activity Statements (BAS), collect GST, and claim credits. Missing this can mean penalties. (Australian Taxation Office) - Use a Tax Agent If Unsure
If you are not confident doing it yourself, using a registered tax agent helps. They can guide you through these rules, ensure you don’t miss deductions, meet deadlines, etc. Saves errors and stress. (Australian Taxation Office)
What D&B Accountants Can Help You With
Here’s how we can assist to ensure your tax time goes smoothly:
- Reviewing your income sources to make sure nothing is missed.
- Helping you identify all valid deductions and advising on apportionment if expense items are partly for personal use.
- Setting up or cleaning up your record-keeping systems so everything is easy to access.
- Checking whether you need to register for GST, lodge BAS, keep up with PAYG instalments, etc.
- Advising on using the ATO tools / apps effectively.
Final Thought
Tax time doesn’t have to be overwhelming. If you stay organised, keep good records, and know what you can legitimately claim, you’ll avoid common mistakes. At D&B Accountants, we’re here to help you get it right, so you can focus on running your business with confidence, not worrying about the paper.