Top Tips to Help Sole Trader Clients Stay Compliant

The ATO has identified several common mistakes among sole traders. To help your clients stay compliant, watch out for the following areas:

Unreported income – This includes income from side hustles, cash jobs, or payments in-kind/barter deals.
Overclaimed expenses – Sole traders sometimes claim expenses related to personal use or overstate the cost of goods sold and other business costs.
Business losses – Errors in calculating losses can affect tax outcomes.
Non-commercial business activity losses – Sole traders may incorrectly claim and offset these losses against other income sources.
Personal Services Income (PSI) – Misreporting PSI to gain tax benefits can trigger ATO reviews.
GST obligations – Not registering for GST can be an issue, especially for taxi or ride-sourcing operators or when reaching the GST turnover threshold.
Record-keeping – Accurate and complete records are essential for compliance and claiming deductions.