Don’t get caught unprepared at tax time. We’ve all known that the end of the financial year is at the same time every year, yet many people seem really surprised that it’s upon them again.
This year, take a little time to prepare yourself for tax time and you’ll find it much easier.
Besides, when you have all your documents in order and add up all the receipts you have accurately, you can even reduce your accountancy costs a little.
Collating Your Income Paperwork
Your first step should be to collate your income documentation. This means putting together all your payment summaries from your employer showing your salary, benefits, allowances and tax paid. You should also put together any other documentation you have showing any other income earned.
This can mean Centrelink benefits or any statements you have showing income earned from interest on savings, dividends earned from share holdings or rental income received from investment properties.
If you sold an investment property or any shares throughout the financial year, you’ll need to include documents verifying these too.
People often forget about foreign pensions and other income outside of Australia- make sure that you include ALL income- even that from overseas.
Gathering Your Deductible Expenses
Put together any receipts for deductible items you paid for. This includes any eligible expenses you paid for work or study, any payments you might have made for private health insurance.
If you use your car for work related travel outside of travelling from your home to your regular place or business, or to a second job, then you may also be able to claim on some of your fuel costs. You may need to have kept a log-book verifying the kilometres you travelled.
Don’t forget to include any personal contributions you might have made to your superannuation fund.
The documents you put together showing the sale of any assets throughout the year, such as shares or properties other than your own home, will need to be included here too. This will include dividend reinvestment statements where you received extra shares instead of dividends.
Other deductions that people often forget about include income protection insurance and medical expenses- make sure you take all of this info to your accountant.
Quick Calculations
It might be wise to spend a bit of time adding up the totals of the receipts and statements you’ve gathered. While this might seem like a tedious chore, the more you can do to make it easier for your accountant, the more streamlined the process of preparing your tax return can be.
If you don’t have specific accounting software, it’s very easy to create a simple system using a basic spreadsheet. Simply put each individual expense and income amount into a different column and add up the total within each column.
Preparing for tax time doesn’t need to be difficult, but it pays to be sure you have everything you need. You’ll be able to get far more done with one simple appointment with your accountant or tax agent rather than having to contact them over and over again with extra information.