Sole Trader Accounting and Tax Return

Sole Trader Accounting and Tax Return

Accounting and record

There is no special legal accounting or recording requirements. The only administration system required is an accounting or bookkeeping system that produces a statement showing business revenue and expenses, and the profit or loss.

Reporting and paying income tax

As a sole trader, you use your individual TFN when you lodge your tax return. The business income is treated as your individual income and you are solely responsible for any tax the business must pay. This means that, after claiming a deduction for all allowable expenses, you include all your business income with any other income and report it on your individual tax return.

As a sole trader, you pay the same tax as individual taxpayers, at personal income tax rate. You must generally pay PAYG instalments during the year towards the amount of tax you expect to pay at the end of the year.