22 Jun TAX TIME: 5 THINGS YOU SHOULD NOT DO
Aside from the massive EOFY car sales, the end of financial year also marks tax time. To ensure the success of your financial planning, you have to sort out your taxes.
However, putting together your tax return can be a daunting process. There’s that impromptu hunt for your old receipts and financial documents, and all the doubt about what you can claim for when it comes to work expenses.
Guess what? Tax time should never be a hard time. (Just think of the money you could potentially land bank into your account!) You got one more week before the month ends. Here are some easy tips to guide you as you lodge those paperwork!
Don’t DIY your way out of it.
You can, but don’t do it. If you haven’t spent several years of your life working exclusively in tax, don’t do your own tax returns. Hire someone professional to do it for you. No, they’re not free, but the amount of money (and stress) they can save you may be worth it.
Accountants and other tax experts know lots of things about the mysteries of tax that you probably don’t. They can uncover deductions you never knew existed. They can fix up errors that might slow down your refund – or worse, cause you to be audited. Having a registered tax agent complete your return can also reduce your risk of having problems with the ATO.
Don’t lose your receipts!
Develop the habit of keeping your tax records– receipts, credit card statements, bank records, GST details, previous year’s tax records and logbooks. This will enable you to claim everything you’re entitled to. You can keep a folder of all the paperwork, label them properly, and make sure you have a soft copy of these documents in your computer or in an external hard drive. There are also a number of mobile apps for tax record-keeping, or just to keep track of all your expenses. You can download the official ATO tax app allowing you to track, calculate, and find relevant tax information. my Tax is another app where it calculates a huge range of tax liabilities as well as the benefits of salary-sacrificing super and loan repayments. If you want to keep record of your receipts, Shoeboxed app gets the job done.
Eventually, this will come naturally for you as this can save you time and stress. When the time comes, you should be able to locate all of the necessary documents in an instant.
Don’t underestimate a ‘savings’ plan.
Putting a savings plan in place will encourage good habits and help you feel in control of building your nest egg. Set up an automatic transfer from your savings account into an investment. This ‘investment’ could be a high interest savings account which allows you to take advantage of the power of compound interest. Alternatively, you can allot it in your mortgage repayment, which could potentially reduce your loan term.
As the old cliché goes, don’t put off for tomorrow what can be done today. You will have to complete your tax return at some point anyway so why wait for the deadline? Won’t it be a nice feeling knowing everything is sorted out, if not, at least only few things you’ll just have to deal with? Saves time!
You can also avoid paying fines for the late returns. And while the risk may be low if you’re owed money by the ATO, if you are the one owing them money – expect to hear from them.
Don’t hate the game.
Approach tax time in a positive light so that in turn, you will accomplish it successfully. Having a negative attitude towards it can only impede the process. Have the proper mindset and commitment knowing that a small amount of dedication can lead to a great return, it can help to make the whole process feel like less of a chore. Look forward to things you can get out of the whole experience no matter how daunting it can get. Think shopping and holidays!
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