Why do you need to lodge sole trader tax return?

Sole trader means to handle things on your own and if you have a business so it means to manage all business activities at your own risk. To become a sole trader is good but sometimes it's quite difficult. It's difficult when you need to lodge a sole trade tax return. 

As an Australian resident, you have to lodge the tax return every single year either it's business or company or individual or partnership or late tax return, etc. So the same thing goes with the sole trader tax return. Pursuing your business as a sole trader might be simple as it brings flexibility and freedom but along with it, comes lots of responsibilities that are solely borne by the trader. Just like everyone else, sole traders are also liable to pay the taxes in the form of sole trader income tax returns as per their income to the government. To cope with the advancements and swiftness in operations, a sole trader needs to maintain its speed and also check all the deductions he/she can claim on taxes to save money. For most sole traders, it is a challenging task to juggle all tasks together and expect perfection in all. Being a solopreneur, understanding everything is also not possible as speed and time hold the same value for making an established name. To let you stand tall in managing your own venture by streamlining the business structure, you need a sole trader tax accountant who can maximise the tax benefits and guide you overall in the smooth function of your business. 

Advantages of being a sole trader

1. Simple to set up and operate.
2. You retain complete control of your assets and business decisions.
3. Fewer reporting requirements.
4. Any losses incurred by your business activities may be offset against other income, such as your investment income or wages (subject to certain conditions).
5. Allows you to use your individual tax file number (TFN) to lodge tax returns.
6. You are not considered an employee of your own business and therefore don’t pay payroll tax, superannuation, or workers’ compensation on the income you draw from the business.
7. Relatively easy to change the business structure if your business grows or if you wish to wind things up.

Disadvantages of being a sole trader

1. Unlimited liability means all your personal assets are at risk if things go wrong.
2. Little opportunity for tax planning – you can’t split business profits or losses with family members and you are personally liable to pay tax on all the income from the business.
    

Once the Australian Taxation Office (ATO) has received your income tax return you will be advised if you need to start paying pay-as-you-go (PAYG) installments. The installments are a pre-payment of your tax for the following financial year and you will be credited with these installments on your next income tax assessment.

Until you are required to start PAYG installments consider putting money aside, or making voluntary ATO payments, to budget for any future tax payments.
Tax Return Perth is the best tax agent available in Perth in regard to all types of tax return planning and services.