- Tax Return for Sole Trader and Small Business
- All entities: Sole Traders, Partnerships, Companies Trusts, Self Managed Super Funds (SMSF)
- Business Activity Statements (BAS)
Small Business Tax Specialists and Consultants
As ATO BAS agents, we specialise in small and growing business, from tax returns, BAS & GST compliance, cashflow management and cloud accounting solutions . Our BAS agent services provide your business with helpful, accurate and effective advice. Every business needs someone that they can turn to not just when tax time swings around but throughout the year and at all stages of their business’s lifecycle in order to minimise tax, maximise profit and provide the best possible financial solutions.
Business Activity Statements
If you are registered for GST, then you will need to prepare BAS’s. Cruz & Co can help take the complexity away from this task, by implementing cloud based accounting solutions to help you manage your financial and tax affairs. We can take the administrative burden away, explain the taxes in a simple manner, and do the BAS lodgements so you can focus on what you do best in your business.
Sole Trader Tax Return
Setting up as a sole trader may be the easiest and most practical way to run a business. This has a low start up cost and simple structure in running your business. Tax for sole traders is simply a “business” schedule in an individual tax return. The cost of preparing this tax return is generally cheaper than preparing a tax return for a partnership, company or trust, due to there only being one individual tax return prepared. The other entities require additional tax returns to be prepared, along with the preparation of financial statements as they are separate entities.
How to pay tax as a Sole Trader
When you lodge your first tax return as a sole trader, you may find yourself with a tax bill. This is generally because you will need to deduct and pay your own tax. After lodging your first tax return as a sole trader, the ATO will issue quarterly PAYG instalments and require you to pay tax upfront. Be wary of this, as you will have double the tax to pay that year – meaning that the first tax bill will be payable the same year as the quarterly instalments are payable.
If you generate more than $75,000 income, you will need to register for GST. This will mean that you will charge GST, collect and remit this to the ATO on a quarterly basis.
You may consider opening up a second bank account to hold or save your tax money in preparation for your tax bills.
Transitioning to a company
The tax rate for small business varies depending on your legal entity structure. You may have started your business as an individual sole trader, however there is a point in your business when you may consider transitioning from a sole trader tax return to a company. A sole trader tax rate is the same as the individual tax rates, so once you earn a certain amount, it may be more effective to be in a company structure. The small business tax rate for companies is 28.5%.