We are in the midst of tax time, which means some of us will be scrambling to get all the necessary paperwork together to send to our accountant or tearing our hair out in anticipation of completing a return ourselves.
Unfortunately, it may be too late to be the super-organised person you’ve always wanted to be for this year’s return but if you follow these four simple tips from our Chief Financial Officer, Gerald White, by next year you could almost look forward to tax time! (Well … we did say almost)
1. Have an awesome filing system!
Channel your inner perfectionist. Odds are you’re not going to refer to a receipt again once you’ve entered it into your spreadsheet or bookkeeping software but if you file your receipts correctly it will make answering all the tricky questions accountants throw at you a breeze. If you file correctly the first time, you won’t have to do it again AND you will be able to find it when you need to. The key is to set up a logical system and then consistently file your documents.
2 Do little and often
Rather than leaving everything to pile up until tax time rolls around, make a regular appointment with yourself in your diary to maintain paperwork. Once a month, note down all of your expenses and sort through your paperwork.
3. Understand what you can claim
It’s a good idea to talk to an accountant who specialises in tax so you have a good idea of what deductibles you can claim. That way you can be sure to only keep the receipts that you really need and not keep hold of excess papers. Tax time is a great time to think about your budget and expenses. By having an efficient system and a clear overview of what comes in and goes out, you’ll be much more motivated to save more each month.
4. Talk to your accountant
There may be tax concessions ending at year end that you may be able to take advantage of. They’ll be able to advise you on what to do to reduce that profit or to ‘use’ up that capital gain to reduce your income tax. The key is to contact them early enough so you can act upon the advice they give you, should you choose to do so.
So even though the dust is yet to settle on this year's tax, with a little bit of planning, you can save yourself a lot of pain and angst when tax time rolls around again in 12 months’ time.