Sole Trader Tax Return Online

Being the simplest and cheapest business structure, a sole trader is an individual running a business. As a sole trader, you are the owner and you control and manage the business. Legally, as a sole trader, you are responsible for all aspects of the business, including its debts and losses.

Here are the key characteristics of a sole trader:

• Simple to set up and operate
• It gives you full control of your assets and business decisions
• Requires fewer reporting requirements and is generally a low-cost structure
• Allows you to use your individual tax file number (TFN) to lodge tax returns
• It doesn’t require a separate business bank account, although this is recommended to make it easier to keep track of your business income and expenses
• Requires you to keep financial records for at least five years
• Has unlimited liability, and all your personal assets are at risk if things go wrong
• It doesn’t allow you to split business profits or losses made with family members
• It makes you personally liable to pay tax on all the income derived

Under this business structure, you can employ people to assist in your business, but you must be aware of the legal obligations associated with hiring employees, such as:

• workers compensation insurance, and
• superannuation.