Tips to help sole trader clients

The ATO is seeing sole traders make mistakes in the following areas:

• not reporting all income — this includes income earned outside their business (like a 'side hustle'), cash jobs, or payments in-kind/barter deals;
• overclaiming expenses — this includes claiming the portion of an expense related to personal use, or overstating the cost of goods sold and other business expenses;
• calculating business losses;
• incorrectly claiming and offsetting losses from non-commercial business activities against other income sources;
• misreporting personal services income ('PSI') to gain tax benefits;
• not registering for GST if they are in the taxi or ride-sourcing industry, or when they reach the GST threshold; and
• not keeping accurate and complete records.

Editor: If you need assistance with any of the above, please contact our office.

Please note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information's applicability to their particular circumstances.