How sole traders and gig economy workers can get ready for EOFY

As of June 2023, there are  2.5 million  actively trading businesses in Australia, and there are an estimated  200,000 to 250,000  gig economy workers. 



As we approach the end of the financial year, many of these business owners and gig workers are feeling pressure to meet their tax obligations. 



After all, collating income sources and receipts, managing deductions, and filing one’s tax return correctly is no mean feat. Yet, onboarding an accountant as a sole trader can prove too costly. To reduce the stress and ensure that every necessary aspect is covered, a structured approach to tax time is typically ideal. This is how sole traders and gig economy workers can best get ready for EOFY. 



Keep an eye on tax dates 



You don’t want important deadlines creeping up on you without being pre-prepared. Keep in mind: not meeting your tax obligations can have serious repercussions so it’s essential to stay across timings.  The tax year begins on the 1st of July and ends on the 30th of June each year. The 30th of June is also the final day to claim deductions for business expenses incurred throughout the year. The other key date is the 31st of October––this is the deadline for individuals and businesses not using a registered tax agent to lodge their tax returns.



Gather financial records 



To prepare for tax time, it’s necessary to organise your financial records. This includes income, expenses, and bank statements.Ideally, you’ll have kept good records throughout the year that you can now collate and use for your tax return. This likely includes a balance sheet that shows your overall profit and loss. 



Consider deductions and contributions 



It’s then necessary to identify any expenses that are considered deductions on your taxable income. This can include things like business expenses, asset purchases, and charitable contributions. Anything from transport costs to tech purchases, and phone bills can be considered expenses if they meet the criteria, so keep this in mind. You might also consider making superannuation contributions. Paying yourself super is essential for your retirement and it can reduce the amount of tax you pay at the end of the year.  



Prepare your tax lodgment 



Once you’ve gathered all the necessary documents, it’s time to get started with lodging your tax return. First, it’s helpful to check the ATO website for any changes in tax laws that may affect your return. It’s also necessary to consider whether you need to prepare an individual or business tax return. Then, prepare your tax return in accordance with Australian laws via myGov through the Australian Tax Office website. 



Consider financial planning for the new tax year 



With your earnings and expenses in mind, it’s important to plan financially for the next financial year. This might include reassessing the type of business structure you have, setting financial goals, and considering how you could be better with tax deductions in future. You also may consider whether you will continue to manage your own tax affairs in the coming year. 



Simplify tax time 



For sole traders, tax time can cause plenty of stress, yet having a dedicated accountant can be out of reach. Fortunately, these days, there’s a solution. Dedicated platforms are designed to help sole traders and gig workers with invoicing, streamlined payments, and tax returns. The good news is, these solutions are typically user-friendly, can be used on the go, and are competitively priced. Platforms like TaxLeopard, for example, streamline tax time to take care of your invoices, receipts, payments, logbook, bookkeeping, business activity statements, and tax returns with minimal input from you. That means you have peace of mind that your financial obligations are taken care of and more time to grow your business. 



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