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wdgcpsa(Newbie)Newbie
11 July 2024

I have just started up my first business as a sole trader and after speaking to my accountant to say I'm confused is an understatement.


I just need to know if its best to have a set amount deducted from my business account as Drawings or should it be shown as something else, my accountant told me to take everything out of my 1 account because as a sole trader everything I make is mine and I'm taxed on it accordingly but I find this a strange practice I would of thought that you would just take drawing or what ever other way you can do it each week or fortnight into your personal account so its not so hard to keep everything accurate.


Any Help would be very much appreciated.

.

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290 views
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Most helpful reply

SandraATO(Community Support)Community Support
16 July 2024

Hi @wdgcpsa


Let's see if I can help clarify


Your tax agent is correct, as a sole trader all profit or loss is yours as an individual.


Want a set amount each week or fortnight. You can, but you'll need to make sure that you're not taking out more than you can afford.


And to help make sure that you don't end up with a tax debt you could:

  • Check out our tax tables - it will provide an idea on how much tax you should be putting aside.
    • Make a payment to your tax account. Added as a credit when you lodge your tax return.
    • Open a separate account and pop some money away each month.
    • Opt in to PAYG instalments (available via MyGov). These are quarterly activity statement where you pay your tax in advance. So, anything that you pay from 1/7/2024- 30/6/2025 gets added to your 2025 return. And will help to reduce your overall tax payable amount. If you pay too much, we'll refund you.

Good luck with your business.

All replies

Most helpful reply

SandraATO(Community Support)Community Support
16 July 2024

Hi @wdgcpsa


Let's see if I can help clarify


Your tax agent is correct, as a sole trader all profit or loss is yours as an individual.


Want a set amount each week or fortnight. You can, but you'll need to make sure that you're not taking out more than you can afford.


And to help make sure that you don't end up with a tax debt you could:

  • Check out our tax tables - it will provide an idea on how much tax you should be putting aside.
    • Make a payment to your tax account. Added as a credit when you lodge your tax return.
    • Open a separate account and pop some money away each month.
    • Opt in to PAYG instalments (available via MyGov). These are quarterly activity statement where you pay your tax in advance. So, anything that you pay from 1/7/2024- 30/6/2025 gets added to your 2025 return. And will help to reduce your overall tax payable amount. If you pay too much, we'll refund you.

Good luck with your business.

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