Sole Trader Tax Return & Business Accounting
Annual Return Preparation, Business Deductions, GST/BAS & Compliance for Australian Sole Traders
Service at a Glance
Personalized scope & lodgementIndividual carrying on an active enterprise (ABN)
Business schedule reported inside Individual Income Tax Return
Business-use percentages, vehicle logbooks & home office
GST, BAS, PAYG instalments & employer superannuation
100% online video conference, phone or in person
- Pre-lodgement draft walkthrough & written client sign-off
- Extended ATO tax agent lodgement deadlines available
- Transparent upfront quoting & zero lodgement without approval
How Does a Sole Trader Tax Return Work?
A sole trader is an individual carrying on a business. Business income and deductible business expenses are generally reported in the business section of the individual’s tax return. There is no separate income tax return for the sole trader business itself.
Business Section of Your Individual Return
The return may need to deal with sales or service income, business deductions, depreciation, business-use percentages, trading stock, losses and other items depending on the nature of the activity.
A sole trader tax accountant can help separate business items from private spending and identify records needed to support the figures reported. If the business makes a loss, whether it can be offset in the current year or must be deferred depends on the applicable loss rules and the taxpayer’s circumstances.
Individual Carrying on a Business
A sole trader is an individual carrying on a business. Business income and deductible business expenses are generally reported in the business section of the individual’s tax return. There is no separate income tax return for the sole trader business itself.
Separating Business From Private
A sole trader tax accountant can help separate business items from private spending and identify records needed to support the figures reported, including business-use percentages and substantiation.
Business Loss Rules & Deferrals
If the business makes a loss, whether it can be offset in the current year or must be deferred depends on the applicable loss rules (such as non-commercial loss provisions) and the taxpayer’s circumstances.
What the Sole Trader Business Schedule Encompasses:
Business Income and Expenses
Sole traders generally need to report income earned from the business and can claim deductions for expenses that satisfy the applicable tax rules. Where an expense has both business and private use, only the business-related portion may be deductible.
Equipment & Tools
Commercial tools, trade equipment, machinery, and specialized business apparatus.
Software & Technology
Cloud accounting subscriptions, industry apps, domain hosting, and IT infrastructure.
Professional Fees
Accounting fees, legal advisory, business consulting, and industry memberships.
Business Insurance
Public liability, professional indemnity, commercial vehicle, and tool insurance.
Advertising & Marketing
Website development, digital campaigns, social media ads, signage, and promotions.
Subcontractor Costs
Payments to bona fide independent subcontractors and specialized trade assistants.
Motor Vehicle Expenses
Travel between job sites, client visits, fuel, maintenance, and logbook substantiation.
Home-Based Business Costs
Dedicated home office heating, lighting, internet, phone, and depreciation costs.
Asset Purchases & Capital
Depreciating assets, simplified depreciation pool, and balancing adjustments.
Substantiation, Depreciation & Private Use Rules
Common areas requiring review can include equipment, software, professional fees, insurance, advertising, subcontractor costs, motor vehicle expenses, home-based business costs and asset purchases. The treatment of each item can vary, particularly where capital expenditure, depreciation, private use or specific substantiation rules apply.
GST, BAS and PAYG Considerations
A sole trader may need to register for GST when the relevant registration requirements are met, or may choose to register in some circumstances. Once registered, GST and BAS obligations need to be managed separately from the annual income tax return.
GST Registration & BAS Lodgment
A sole trader may need to register for GST when the relevant registration requirements are met, or may choose to register in some circumstances. Once registered, GST and BAS obligations need to be managed separately from the annual income tax return.
PAYG Instalments (PAYGI)
PAYG instalments may also apply depending on the taxpayer’s circumstances. Pre-paying tax across quarterly activity statements avoids unexpected year-end tax liabilities when business profits increase.
Staff, Payroll & Superannuation
If you employ staff, payroll, PAYG withholding and superannuation obligations may arise. Single Touch Payroll (STP) reporting and timely super guarantee payments are mandatory statutory employer requirements.
Record Keeping for Sole Traders
Good records are central to accurate sole trader accounting. The ATO requires businesses to keep records that support their tax, superannuation and registration affairs. Depending on your business, useful records can include:
Sales & Invoicing
- Sales invoices and payment records
- Point of sale (POS) and merchant payment summaries
Banking & Operating Expenses
- Business bank and credit-card statements
- Expense invoices and receipts
Travel, Vehicles & Assets
- Vehicle or travel records where relevant (logbooks, odometer records)
- Asset purchase and disposal documents
- Loan and finance records
Taxes, Payroll & Prior Returns
- GST and BAS working papers
- Payroll and contractor records where applicable
- Prior-year tax returns and financial reports
Statutory 5-Year Record Keeping
Business tax records generally need to be kept for five years, although records relating to assets, capital gains or carried-forward losses may need to be retained for longer.
How This Page Differs From a Basic Individual Tax Return
This service is designed around people actively carrying on a business as a sole trader. It focuses on business income, business deductions, accounting records and related compliance. For a return that is primarily salary, investment or other personal income, see our Individual Tax Return service.
Active Sole Trader Business
Focuses on trading revenue, allowable business operating deductions, equipment depreciation, business-use percentages, GST/BAS working papers, and business schedules.
How Financially Up Can Help
Our sole trader accounting services can include reviewing business records, preparing year-end accounting figures, preparing the business components of the individual tax return, reviewing GST/BAS information where relevant and helping identify missing information before lodgment.
Reviewing Business Records
Checking sales records, expense receipts, bank statements, and software working papers for accuracy.
Preparing Year-End Figures
Reconciling profit and loss numbers, asset depreciation schedules, and trading stock balances.
Business Tax Return Schedules
Preparing the business components of the individual tax return and identifying missing information before lodgment.
Reviewing GST/BAS & Scoped Advisory
Reviewing GST/BAS information where relevant. Where you need tax planning, business restructuring or advice beyond preparing the return, the scope can be agreed separately.
Tax planning, business restructuring and other advisory matters are not automatically included in standard return preparation. Where you need advice beyond preparing the return, the scope can be agreed separately.
Why Choose Financially Up?
Financially Up is a registered tax agent with more than 10 years of experience. Our professional accounting and tax team includes CPA and IPA members. We support sole traders Australia-wide through online appointments, with in-person meetings also available where preferred.
Registered Tax Agent
Financially Up is a registered tax agent (TPB #26242127), providing authorized ATO representation and lodgment program extensions.
10+ Years of Experience
More than 10 years of experience delivering practical accounting and taxation services to Australian businesses and sole traders.
CPA & IPA Members
Our professional accounting and tax team includes qualified CPA and IPA members upholding the highest ethical standards.
Australia-Wide Support
We support sole traders Australia-wide through online appointments, with in-person meetings also available where preferred.
Frequently Asked Questions
Answers to common questions about Australian sole trader tax returns, deductions, GST registration, multiple income streams and bookkeeping.
Identifying eligible deductions is crucial for minimizing your taxable income and maximizing your tax savings. Our team at Financially Upwill diligently explore all potential deductions applicable to your situation. From commonly claimed deductions to often overlooked ones, we leave no stone unturned in helping you claim every deduction you're entitled to.