Tax time for a sole trader can be stressful, however with a little planning you don’t need to dread doing your tax return.
Take Sophie for example. Sophie is a self-employed professional florist whose total gross business income is $82,000 per annum.
Sophie knows that she’ll have a tax bill at the end of the financial year, so she decides to set up weekly payments from her business account to the ATO to cover the bill.
Sophie also follows tips she received from her tax agent and the ATO website. This ensures she can meet her tax obligations, which makes tax time a smoother experience.
- Sophie is registered as a business, as she’s carrying on an enterprise and is registered for GST because her business has a GST turnover of $75,000 or more.
- She reports all assessable income, including non-monetary payments and payments in kind.
- She claims deductions for expenses, but only claims the business portion of an expense if it’s for both business and private use, including for her motor vehicle.
- She correctly reports any personal services income (PSI).
Sophie uses the ATO app to access and manage her tax and super, and the ATO myDeductions tool to capture expenses as they happen.
Be like Sophie and find more information at ato.gov.au/sbsupport or speak with the team at Cotchy. We’re here to help you with your tax. Contact us today!
Source: ATO Newsroom