By far I find this the least intuitive part of myTax.
You're a sole trader. Check.
You pass the PSI rules (after wondering why the test isn't the other way around, proving you're a business to get additional tax breaks). Check.
You start to complete "Business/sole trader and partnership income" while reading "myTax 2024 Business income statements and payment summaries | Australian Taxation Office" and the confusion begins. You think "the government makes video for this type of stuff" and the only video that gets to the end of the myTax procedure is some dude that did labour hire that comes under PSI instead of employee for some reason: myTax 2024 Personal services income | Australian Taxation Office
I could be wrong, but I would imagine that the majority of people that offered their services for a few weeks a year as a sole trader at an agreed hourly rate simply issued a few invoices and at tax time just want to pay their tax without making deductions, splitting income or going through a tax agent.
Why does myTax have to be so unintuitive?
The average person would look at the "Business income statements and payment summaries" and their first instinct is "I didn't know businesses I invoice are meant to pay my tax?!". They'll look at the form and think "Oh, I'll just fill in the business details of who paid me here", not realising that this section is for people that had tax paid for them by another business serving as a quasi-employer. After finding they can't enter $0 in tax (as the document already implied) they'll re-read the official instructions and see this:
- Business income statements and payment summaries where no tax has been withheld, first record the information, delete it from this section and then if
And then they wonder what it means when it says to record the information then delete it. Is it mandatory?
They get nervous when they realise that they don't meet the criteria for any of the "payment types". Only when/if they move on to the next section for Personal Services Income (myTax 2024 Personal services income | Australian Taxation Office) might they realise that their income simply goes under "Other", which has nothing to do with "other specified payments" from the previous section, which includes obscure references to tutorial services for the Indigenous Student Success Programme, income from translation and interpretation services for the Translating and Interpreting Service National of the Department of Home Affairs, or income as a performing artist in a promotional activity.
For my future self and any Personal Services Income Rules Passing Sole Trader looking for which field to fill out, here is a simple screenshot explaining what to do:
personal services income sole trader — Postimages
If I'm wrong, please correct me. If I'm right, the system needs to be simplified. I find it ridiculous that the word "other" would be applied to the most basic system of making money as an individual service provider.
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