The short answer for sole traders
If you trade under your own ABN — as a contractor, freelancer, gig-economy driver, consultant, or any business structure that flows income to your individual tax return — the answer is "almost certainly yes" for most sole traders. Here's why.
Sole-trader returns include a Business and Professional Items schedule that myTax does not pre-fill for you. You're declaring gross business income, then claiming the business deductions against it. The ATO scrutinises this schedule more heavily than salaried-employee deductions, and the rules for what's deductible vs personal use are nuanced.
A standard Registered Tax Agent fee for a sole-trader return is AU$300–600+ at traditional accountants. a registered tax agent (see the directory)
What makes a sole-trader return harder than a salaried return
1. The Business schedule itself
myTax has a Business schedule but the ATO assumes you understand:
- Cash basis vs accruals basis accounting (most sole traders use cash; some have to use accruals)
- GST registration threshold ($75,000 turnover) and what to do if you crossed it mid-year
- Trading stock on hand at 30 June (if you sell physical goods)
- PSI (Personal Services Income) rules — if more than 80% of income is from one source, PSI rules may push deductions back into your personal income
- Apportionment of mixed personal / business expenses (phone, internet, vehicle, home office)
2. Mixed personal-business expenses
Almost every sole-trader expense has a personal component. The ATO expects you to:
- Keep a diary or log for vehicle use (logbook method) or claim cents-per-km up to 5,000 km
- Apportion home-office costs by floor area used for business
- Apportion phone and internet by work-use percentage with evidence
- Track depreciation schedules for assets >$300
Mis-apportioning is the most common cause of ATO follow-up letters for sole traders.
3. Specific high-risk areas the ATO targets
The ATO publishes annual focus areas. For sole traders the recurring high-scrutiny items are:
- Vehicle expenses — especially when claimed without a logbook
- Home office / business use of home — especially full electricity / depreciation claims
- Travel between business locations — vs home-to-work (which isn't deductible)
- Capital purchase vs immediate deduction — instant asset write-off thresholds change yearly
- Entertainment / meal expenses — generally NOT deductible despite common myth
A Registered Tax Agent identifies these traps proactively.
4. PSI rules — the trap that catches contractors
If 80%+ of your income comes from one client (common for IT contractors, design freelancers, consultants), you may fall under Personal Services Income (PSI) rules. PSI restricts:
- Deductions for home office, motor vehicle to/from home, payments to spouse
- Ability to split income with a family member via a trust
Whether PSI applies depends on the results test, unrelated clients test, employment test, and business premises test. Getting this wrong is a common audit trigger. A Registered Tax Agent runs through the tests for you.
When DIY via myTax might still be enough
Some sole traders have very simple returns that fit comfortably in myTax:
- Income from one consistent activity (e.g., Uber driving only, freelance writing only)
- Under $50k gross income (not GST-registered)
- No home office or vehicle apportionment (or only cents-per-km up to 5,000 km)
- No depreciating assets above $300
- All income from clients who issue you proper invoices/RCTIs
For this profile, the myTax Business schedule is workable in a couple of hours.
The realistic financial breakeven
Need a professional? Browse every TPB-registered tax agent near you in the AusTax directory, or post a request and matching practices will contact you — free.
For the cost to be "worth it" purely on tax outcome, the agent needs to find an extra deduction of:
- $1,200+ (at 32% marginal rate, returns $384 — covers a $400 traditional accountant fee)
For most sole traders, this threshold is crossed easily on one of:
- Properly apportioned home office costs (often $1,000+ deduction missed in DIY)
- Logbook-method vehicle deductions (often higher than cents-per-km cap)
- Forgotten subscriptions / software / cloud-tools deductions
- Correct depreciation schedule for laptops / phones / equipment
So the breakeven analysis favours Agent assistance for most sole traders. Add the time saved (4–8 hours of myTax Business schedule work) and audit risk reduction, and the case is strong.
Need a professional?
Through partnerships with TPB Registered Tax Agents:
a registered tax agent (see the directory) The fixed-price covers standard individual sole-trader returns.
If you want to compare paths before committing, see the full decision guide.
The 4 questions to answer right now
Need a professional? Browse every TPB-registered tax agent near you in the AusTax directory, or post a request and matching practices will contact you — free.
AI analysis on this page is general information only, not tax advice. Specific PSI / GST / business-deduction questions benefit from review by a Registered Tax Agent who can examine your circumstances.
Need Help With Your Tax Return?
Complex situation? a registered tax agent (see the directory) Our partner agents review every detail for accuracy and compliance.
*Disclaimer: This is general information only and does not constitute personal tax advice. Consult a registered tax agent for advice tailored to your specific situation. Always verify against the latest ATO guidelines at ato.gov.au.*