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.
