Do I Need an Accountant as a Sole Trader in Australia?

Most sole traders ask this in October, with the return still sitting there. The timing matters more than the answer. If you lodge your own return, it is due 31 October, and because 31 October 2026 falls on a Saturday, the last day this year is Monday 2 November. The later due dates people mention only exist inside a registered tax agent’s lodgement program, and the ATO says a new client should contact the agent before 31 October to be part of it. If a return from an earlier year was still outstanding at 30 June 2026, even the agent’s due date is 31 October 2026.

So do you need an accountant as a sole trader? Not by law. What follows is what you take on by doing it yourself, the years when myTax handles it fine, the ones when it doesn’t, and what the alternative costs.

What a sole trader actually lodges

A sole trader lodges one return: your individual tax return, with the business and professional items schedule attached. There is no separate business return, because the business is not a separate taxpayer. Its profit is your income, taxed at your own rates alongside anything else you earn.

You lodge even in a quiet year. The ATO says there is no threshold for business income, and a sole trader must lodge even when their income is below the tax-free threshold.

The schedule narrows the options to two. According to the ATO’s page on the business and professional items schedule, it isn’t available to download: you lodge it through myTax or through a registered tax agent, and a paper version is only sent on request if you can’t use either. So the real decision is myTax or an agent.

What myTax fills in, and what it leaves to you

myTax is open to sole traders. The ATO describes it as available for “all individuals and sole traders who want to lodge their own tax return”. What it does not do is build your business figures for you.

Business income pre-fills only when someone else has already reported it to the ATO. Everything else is typed in by you.

The ATO’s myTax instructions for business income ask for income and expense amounts “derived from your accounting system or financial statements”, forming part of your profit and loss statement. myTax takes a profit and loss as its input. It doesn’t produce one. Card payments processed through a payment system may appear as a reminder under the schedule, but as a prompt to include them, not as a figure.

Every expense you enter has to pass the ATO’s three rules for a business deduction:

• it was for your business, not for private use
• where it was part business and part private, you claim only the business portion
• you have records to prove it.

When you don’t need an accountant

Plenty of sole traders lodge their own return and get it right. myTax suits you if most of this describes your year:

• Income from a handful of clients, all of it traceable to your bank account
• Not registered for GST
• A short list of expenses, few of them part private
• No vehicle claim, or a straightforward claim for a car
• A profit for the year, not a loss
• Every earlier return already lodged

That describes a lot of first-year freelancers, tutors and side businesses. You need a myGov account linked to the ATO, and the pre-fill that does apply is mostly in by late July. Getting ready means a total of the year’s income, a list of expenses with the receipts behind them, and your bank statements to check both against.

If wages are still the bigger part of your income and the business is small, the same call is worked through from the salary side in whether a tax agent is worth it over myTax.

When doing it yourself stops being simple

The size of your income doesn’t decide it. What the income comes with does. These are the points where a self-lodged sole trader return usually goes wrong.

You’re registered for GST

You must register for GST once your GST turnover reaches $75,000, and you have 21 days from that point to do it. The test is turnover, not profit, and it rolls month to month, which is set out in full in the GST registration threshold.

Once you are registered, the income and expenses in your return go in without the GST, expenses are reduced by the GST credits you claimed, and the totals have to agree with the BAS you lodged during the year. If you are not registered, you claim the GST-inclusive cost instead. Either way, a mismatch puts your return and your BAS out of step with each other.

You drive for work

A sole trader claiming a car chooses between the cents per kilometre method and the logbook method, and can change methods from year to year. A vehicle that isn’t a car, such as a ute with a carrying capacity of one tonne or more, has to use actual costs. myTax asks you to code which method you used. The choice decides how much you can claim and what records you need to support it, and the ATO warns that using the wrong method can lead to an incorrect claim.

Most of your income is for your own work, from one client

Personal services income is income produced mainly, more than 50%, from your skills or effort as an individual. A contractor paid by the hour or day by one main client is the classic case.

Whether the PSI rules apply is decided by tests. The results test needs you to be paid to produce a result, supply your own tools and fix defects at your own cost, for at least 75% of your PSI. The other tests only help if less than 80% of your PSI comes from one client and its associates. PSI has its own section in myTax, and the tests are yours to work through before you fill it in.

The business made a loss

A business loss does not automatically come off your wages. myTax has a separate section for deferred non-commercial business losses, and whether a loss can be offset against your other income that year depends on a set of tests. Where they are not met, the loss is deferred to a later year instead of reducing this year’s tax.

Your first tax bill is on the way

Nobody withholds tax from a sole trader’s business income, so the first profitable year usually ends in a bill. Once your latest return shows instalment income of $4,000 or more, tax payable of $1,000 or more and notional tax of $500 or more, the ATO enters you into PAYG instalments, and most people then pay quarterly. The first bill and the first instalment notice tend to arrive close together.

You’re weighing up a Pty Ltd

A company changes the answer entirely. It cannot lodge through myTax, it runs to a different deadline, and it answers to ASIC as well as the ATO, which is covered in whether a company needs an accountant.

What an accountant changes besides the return

A registered agent gives you three things you can’t get by self-lodging: more time, some protection from penalties, and a registered person responsible for the work.

More time to lodge

A registered agent lodges on the ATO’s lodgement program, which moves most clients’ due dates well past 31 October. The ATO’s page on lodging through a registered tax agent says that if you’re using a tax agent for the first time, you “should contact them before 31 October to be part of their lodgment program”. For the 2025-26 return, the dates look like this:

The program does not rescue a return that is already behind. Payment dates move with the lodgement dates, and both are laid out in tax return deadlines in Australia.

Some protection from penalties

Under the safe harbour provisions the ATO administers, you are not liable for certain penalties, including for lodging late, where a registered agent was responsible. You need to show you gave the agent all the relevant information to lodge by the due date, and that their failure was not reckless or an intentional disregard of the law. The TPB’s safe harbour page sets out what it covers. Lodge yourself and there is nobody else a penalty can attach to.

A registered person responsible for the work

Only a registered tax agent can charge a fee to prepare and lodge your return, and the TPB register shows who holds registration. A registered agent also never needs your myGov login to act for you. The TPB says a practitioner does not require access to a client’s myGov account, so a service asking for your password is not acting as a registered agent.

Bookkeeper, BAS agent or tax agent?

Your income tax return needs a registered tax agent. Having a bookkeeper keep your books, or a BAS agent lodge your BAS, doesn’t make the return someone else’s job.

The TPB’s list of BAS services covers GST, activity statements, PAYG withholding and payroll, the taxable payments annual report and registering for GST. Income tax is not on it. Plain bank reconciliations and data entry need no registration at all. Your BAS is its own lodgement, reporting GST and PAYG through the year, and it sits outside the income tax return. If you already pay someone, check on the TPB register which registration they hold before assuming the return is covered.

What an accountant costs a sole trader

At ReturnTax a sole trader return is a fixed $330, with your personal return included in the same fee. If you’re registered for GST it’s $440. Extras such as a rental property ($130) or capital gains on shares ($90) are priced per item. The fixed fee assumes tax-ready records, and spreadsheets or bank transactions plus a list of expenses are fine starting points. Tell us what you have and we’ll let you know before any work begins.

The wider market range, and what drives it, is in sole trader accountant costs. How fees differ across structures is in what a business tax return costs.

If your year fits the checklist above, lodging it yourself is a reasonable choice and you can keep the $330. Paying for it isn’t about a bigger refund. What it buys is peace of mind:

• a registered Tax Agent checking your figures before they reach the ATO
• less hassle: you send your records, and the return is prepared and lodged for you, typically faster than working through myTax on your own
• a later due date through the lodgement program, if you start before 31 October and your earlier returns are lodged
• protection from certain penalties where a registered agent was responsible for the failure
• a deduction next year, because the ATO treats the cost of lodging through a registered agent as deductible, generally in the income year you incur it, so the fee for this year’s return comes off next year’s.

Do you need an accountant as a sole trader? It depends on the books

If you land on the second list, a sole trader tax return prepared and lodged by an agent covers the business schedule and your personal return together, and starting before 31 October keeps the later due date open.