Sole Trader Tax Returns

Company structures can be complicated whereas a sole trader structure is cost-effective and simple with minimal legal requirements. Being a sole trader means you pay tax at the same rate as an individual who has a regular job. Say for example as a sole trader you earn $90,000 a year your marginal tax rate would be 37%.

As a sole trader, you can use your personal Tax File Number (TFN) so there is no need to apply for another one.

There are legal obligations that a sole trader must undertake and BBAS Accounting can help you with the following:

Applying for an ABN (Australian Business Number)

• An ABN identifies your sole trader business to the government and community. It is a unique number and every business in Australia must have one. It is used for all your business dealings.

Applying for the GST (Goods and Services Tax)

• As a sole trader, you are obligated to forward to the ATO (Australian Taxation Office) the GST you have collected. This occurs when your business has generated over $75,000 of revenue. A BAS (Business Activity Statement) is submitted to the ATO on a monthly, quarterly or yearly basis depending on the turnover of your business.

PAYG (Pay As You Go) Installments

• You may want to pay your tax in installments instead of a lump sum at the end of the financial year. It may suit your cash flow to take this course of action however it would only apply if your sole trader business is earning a substantial amount of money.

Superannuation

• It is your responsibility to make payments into your chosen superannuation fund. Once you have advised the Australian Taxation Office of your preferred fund these payments are tax deductable.

Deductions

• As a sole trader your private expenses cannot be claimed as a tax deduction, however, some private expenses can. If your car is the only one you have and it is used for both your business and your personal use then the business component can be claimed by either recording the car’s mileage when it is used for business or working out what percentage the car is used for business and what percentage it is used privately.

If you are looking for an accountant in Brisbane or around Australia that can help you with your Sole Trader Tax Return, then don’t hesitate to call the BBAS team. We will always have your best interests in mind and pride ourselves on maximising your tax return. Please contact us by completing our online form below or by calling (07) 3886 1652. We want to make the lodging of your tax return hassle-free.