Hey there,
As your dedicated bookkeeper, I’m here to crunch numbers and empower you to make the most of your business financially. I’ve noticed that even the most conscientious sole traders can sometimes trip up in a few key areas. Here’s a quick guide to help you stay on the right track:
- All Income Matters
It needs to be accounted for if you’re generating income outside of your primary business, whether it’s a side gig, salary, or even non-monetary payments like bartered goods. Transparency here is key to maintaining integrity in your financial reports.
- Be Mindful of Expenses
We all love reducing our tax liability by claiming business expenses, but ensuring that what you claim is genuinely related to the business is essential. Mixing personal and business expenses can muddy the waters and put you in hot water with tax authorities.
- Calculating Business Losses
If your business is running at a loss, it’s crucial to calculate these losses accurately. The consequences of overestimating or underestimating can have varying ramifications, including how you can offset these against other income.
- Non-Commercial Loss Rules
There are specific rules about offsetting business losses against other forms of income. Misapplying these rules can lead to complications, so you’re well-versed
- PAYG Withholding Refunds
Be sure that your claims for PAYG (Pay As You Go) withholding refunds are accurate and justifiable. Incorrect claims can result in penalties, interest, or severe legal action.
- Personal Services Income (PSI) Reporting
You might be subject to PSI rules if you earn income mainly from your skills, efforts, or expertise. Please report PSI to correct tax assessments and penalties.
To make this all a bit easier for you, the ATO has compiled a toolkit with useful links covering everything from business income to deductions. This will be your go-to guide for ensuring you get things right the first time.
Remember, I’m always here for you if you have questions or need a consultation. Together, we can ensure you survive and thrive in your business endeavours.
Best regards,
Katia Chehade, Your Trusted Bookkeeper