Preparing for Tax Time 2017
Remember last year when we all vowed to be much better prepared for lodging our tax returns? Vowing not to wait until the last second or lose those important receipts? Well, now is the time to start getting organised. With the 1 month countdown to the new financial year, here are a few handy tips to consider.
- Know what you can claim
Identifying your sources of income is a good place to start. Income that must be declared includes your salary, super pensions, government payments and investment income. It follows that from this, you will be able to identify the deductions available to you. That is, costs that are directly attributable to your income producing activities.
Deductions that can be made vary depending on your personal circumstance, and although it is okay to get creative, it is essential that the claims being made are allowable, and do not ring alarm bells for the Australian Taxation Office (ATO) upon lodgement. This is where having an accountant comes in handy, to help navigate you through your tax return, ensuring you maximise each claim without overstepping the boundaries.
However, as a rule of thumb, here are possible deductions you should consider: vehicle and travel expenses; clothing, laundry and dry cleaning; gifts and donations; home office expenses; investment expenses; self-education; tools and equipment expenses. These are only some of the general deductions available to you to get you started, not an exhaustive list. Other expenses that you should consider would include income protection insurance, union fees, personal super contributions and in particular, industry specific deductions.
- Get organised
The ‘magic’ your accountant can work to maximise your tax return is certainly worth your time. In saying that, the magic is limited to your assistance in providing documentation to evidence your claims.
The digital age we now live in simplifies this for us; upon simple review of your bank statement, you will be able to jog your memory on the costs you incurred this past year, and run them past your accountant to see if they can be deducted. To help yourself (and your accountant), it is best to tally up your expenses for the year, and collect the corresponding documents.
Additionally, be sure to have available your TFN details and payment summaries.
- Book in with a professional
Take home message: your accountant knows what they’re doing. Have peace of mind knowing that your tax affairs have been dealt with appropriately and most beneficially for you.
If you have investment income, rental properties or are managing your small business, the benefits of seeing an accountant are immeasurable. Not only will you confidently know what you can claim, but you have the opportunity to ask your accountant questions, and gain some industry specific knowledge to best equip you for the upcoming financial year.
And the best part is – by seeing an accountant you’re already kickstarting the year, with the cost of your tax return, being a deduction up your sleeve.