You’ve got a cracking business but your bookkeeping is, well, up the creek to say the least. Those piles of papers you’ve been throwing in a box or backseat of the car all year – it’s time to get them in order. Can tax time be painful? You bet.
But these helpful hacks to the best online tax tools will mean your return gets done without pulling your hair out.
ATO app
The Australian Tax Office’s (ATO) free app allows individuals and sole traders to prepare for tax time throughout the year and includes a number of helpful tools and features. To take advantage of all the available features of the app and to personalise your experience, you will need to create a myGov account and link it to the ATO.
myDeductions tool
This helpful tool in the ATO app lets you capture records and receipts as you go, keeping them all in one place. When you are ready to complete your return, you can either upload them directly to your tax return or email them to your tax agent for them to use. You can also use the myDeductions tool in the ATO app to log work-related trips to stay on top of your vehicle expenses.
Depreciation and capital allowances calculator
Expenses over $300 (for individuals) are dealt with under depreciation rules. These can be claimed using different methods, but this handy calculator lets you work out the depreciation costs that you can claim for the relevant asset(s). Linking the tool to your myGov account will let you upload your calculations directly to your tax return, and save them for future years; otherwise you can simply download them and send them to your tax agent.
Personal services income test
Many individual or sole trader tradies produce personal services income (PSI) for their business through their own handiwork. The ATO classifies income as PSI when more than 50 per cent of the income you've received from a contract is a reward for your personal efforts or skills, rather than being generated by the use of assets, the sale of goods, or from a business structure.
This is distinct from a personal services business (PSB), which has much of the same qualifying criteria, with the key difference being your work is spread across separate, unrelated clients for the financial year. It’s an important distinction as each is treated differently for tax purposes, and individuals earning PSI are restricted in some of the expenses they can claim. This helpful test can help you work out if you are strictly PSI or whether you can qualify as PSB.
Fuel tax credits eligibility and calculator
With most tradies conducting much of their working life out of their vehicle, these useful tools will indicate whether you are eligible to apply for fuel tax credits and the amount you can claim according to your business use.
MyTax tool
The myTax tool, which you can access through your myGov account (provided it’s linked to the ATO) or the ATO app, is available to individuals and sole traders, and links to other ATO calculators such as the Depreciation and Capital Allowances tool.
A lot of the required information – such as salary, health funds, dividends from investment registries, interest from bank accounts and so on – can be pre-filled automatically by the ATO, requiring you just to check it carefully and adjust or add in anything not already covered. It allows you to lodge your return online and will work out any tax you need to repay, or how much you can expect in a refund.
More online tax tools to help in your business
There are plenty of other tools and calculators on the ATO website that can help tradies work out their required record-keeping, obligations and status for tax purposes. We’ve listed some of the main ones that can apply to most, whether you’re an individual, sole trader or small business owner, but others may be of benefit depending on your particular circumstances. Explore the ATO website for the full list.
Keep in mind…
The information in this article is general in nature. It doesn’t take into account your specific financial position, needs or circumstances. You should look at your own financial position, objectives and requirements and seek professional advice before making any financial decisions.
Are you looking for more tax tips?
Check out What can tradies claim on tax and Ten tax time mistakes to avoid this year.
