Even if a sole trader’s income is below the tax-free threshold, the ATO requires business clients to lodge a tax return each year. Recently the ATO issued a media release reminding tax agents and business clients of this obligation.
There is also a Small Business Tax Offset for Sole Traders which can reduce a Sole Trader tax bill by up to $1,000 each year.
The offset, which is worked out on the proportion of tax payable on your business income, is:
- 8% for the 2016–17 income year onwards