With tax season upon us, the Australian Taxation Office (ATO) reveals common tax mistakes of small business owners and sole traders to avoid. These mistakes could delay processing or trigger follow-up checks.
Assistant Commissioner Angela Allen says one of the most frequent issues is not having the right access to ATO digital services. She advises businesses to set up myID or link their myGov account via the Relationship Authorisation Manager. Sole traders can continue using their personal myGov accounts to lodge directly.
The ATO also urges businesses to double-check that they declare all forms of income, including goods or services received through barter or in-kind arrangements. Businesses should also accurately record business losses and separate them from non-commercial losses, as tax law treats them differently.
Another area of concern is record-keeping. Private use of business funds must be clearly tracked, with reliable documentation to support deductions and claims.
To help, the ATO has released a detailed small business toolkit covering topics such as asset write-offs, prepaid expenses and depreciation.
As always, the ATO’s message is simple: get your books in order early and avoid unnecessary stress at tax time.