If you run a business activity yourself in Australia, you need an ABN(Australian Business Number) and pay your tax in sole trader tax return during tax session.
What is ABN?
ABN stands for Australian Business Number. It is a unique 11-digit number that is issued by the Australian Business Register (ABR) to businesses and other entities, such as sole traders, partnerships, companies, and trusts. The ABN is used as a universal identifier for businesses and is required for various purposes, including:
Registering for Goods and Services Tax (GST) and Fringe Benefits Tax (FBT) with the Australian Taxation Office (ATO).
Claiming tax credits and deductions, such as input tax credits for GST.
Dealing with other government agencies.
Conducting business with other entities, such as suppliers and customers.
Registering an ABN
Here are the basic steps to register for an Australian Business Number (ABN):
- Check your eligibility – you’ll need to be carrying on an enterprise in Australia, such as a sole trader or partnership business.
- Gather relevant information – you’ll need your identity details like name, DOB, address as well as business name and details.
- Registration – While individuals with tax expertise may register directly with the ATO. But we recommend you working with a registered tax agent. They can help ensure compliance and advise on obligations. Feel free to contact us as well, we offer registration assistance at competitive rates.
- Receive your ABN – the ATO generally processes applications within 2 business days and emails your ABN.
Sole Trader Tax Return
If you are a sole trader, including sub-contractor, Uber driver, delivery people and other, you need to claim the tax of your business activities. It’s a bit different with individual tax return without a business, such as:
- Sole trader tax return involves declaring gross business receipts on the business sections of the return.
- Individual return reports salary/wages income from employers in the employment section.
- In sole trader tax return, you can deduct a wide range of business expenses that individuals cannot claim. Things like travel, equipment, utilities are deductible.
- Individuals are generally only able to claim personal deductions like financial institution fees, donations, income protection insurance.
- In sole trader tax return, net business profit is taxed at the individual’s personal marginal tax rate.
- Individuals only pay tax on their salary/wage income without expenses reducing it first.
How to Start How to Start a Sole Trader Tax Return
You can file your sole trader tax return through either an accounting agency or our TAX123 online tax return system. Of course, we highly recommend using our system as it is more convenient and fast. You do not even need to leave your home, you can complete your sole trader tax return in an extremely short period of time through our online portal. Our system guides you through the simple steps to ensure accurate tax return preparation. You can easily upload your documentation, review pre-filled information, and instantly submit your return digitally to the tax office. For a stress-free tax season, choose online returns with TAX123 – it’s tax time made easy!
<a href="https://businesstaxreturn.tax123.com.au/start-your-online-tax-return/"Start Sole Trader Tax Return</a>