Sole Trader Tax Debt

If you’re new to your sole trader status, you might be wondering, “do sole traders have to do a tax return?” The answer is a resounding “Yes”. And since a sole trader is someone operating a business as an individual rather than as a company, the sole trader tax rate is the same as for wage earners. This means that your individual tax return and business activities are one, so you don’t need to lodge two separate tax returns. In Australia, sole traders can lodge their returns online using myTax.

If you work from home, you can deduct certain home-based business expenses for an office used for business purposes, including power and other running expenses. Mortgage interest, depreciation deductions, mobile phone, and other business expenses. But should you fail to lodge a return, report inaccuracies or make a mistake and end up owing the tax man money, you have an obligation to repay it.

Your sole trader tax debt obligations also include putting money aside to pay your tax, taking Goods and Services Tax (GST) from customers and taking your income tax from your own pay. GST is non-negotiable. It’s money owed to the government, so you must collect it and not spend it, or you’ll have an ATO tax debt. GST is non-negotiable. You also have an obligation to lodge a Business Activity Statement (BAS) each quarter.

At Tax Negotiators, we know all there is to know about sole trader tax, so if you get into difficulties, we can help you negotiate a payment plan with the ATO to get you out of trouble. Call us today.

Whether you’re a sole trader working from home or you work away from home, you must lodge a sole trader income tax return and get your deductions, depreciation, expenses and other items correct. As a sole trader, you have tax obligations, and if you owe money to the ATO, it must be repaid. But if you’re struggling with your tax debt, call our experts at Tax Negotiators so we can contact the ATO on your behalf and set up a suitable repayment plan.

In Australia, the taxation department is amenable to sole traders and others engaging with their agents to sort out their tax debts for each financial year. They usually only declare a sole trader or other business bankrupt if its agents have attempted to recoup the money owed in various other ways and have not succeeded. These actions may be taken if:

• You have not followed a payment plan agreed to by the ATO.
• A garnishee notice hasn’t been enough to cover enough of your sole trader tax debt.
• No payments have been made and your sole trader tax debt is increasing.

In Australia, the ATO usually sends a Firmer Action Warning or Notice of Intended Legal Action before they open a legal case against you. In Australia, a statutory demand cannot be issues to a sole trader. This is done to warn you of the steps that will be taken in your circumstances unless you engage with the ATO or repay the debt. The ATO can also release a tax debt in certain circumstances.

Don’t let your unpaid tax debt get to these stages. Get expert help to repay your sole trader tax debt either with a payment plan or a sole trader one-off payment before the ATO takes action. Call on the expertise of our team at Tax Negotiators so we can negotiate your sole trader tax debt on behalf of your business today.

Our talented team offers professional advice, including the range of our services, and we can discuss the consequences of the ATO reporting your details and debt to a credit rating or debt collection agency. However, time is of the essence, so act immediately to discover your sole trader debt repayment options for a brighter business future. Contact our team of tax and financial experts at Tax Negotiators today at 1300 277 148 or email help@taxnegotiators.net.au.