It’s nearly tax time! 4 tips to get ready!
With June just around the corner, it’s the perfect time to start getting organised to lodge your tax return. Here are four great tips to help you get ready with as little stress as possible!
1. Decide how you are going to lodge your tax return
Generally you need to lodge a tax return if you have had tax taken out of any payment you have received. If you are still not sure, you can visit the Australian Tax Office (ATO) site for more information. If you do need to lodge a tax return, you can choose either to do it yourself, or have someone help you. DO IT YOURSELF: The tax office provides two free online options for you to do your own tax return, called mytax and e-tax. Otherwise you can do it the old fashioned way and complete a paper based return but be mindful that the ATO is trying to encourage the online option. Remember, if you do it yourself, it must be completed by the 31st October. USE A REGISTERED TAX AGENT: If you are not comfortable doing it yourself, then you can opt to use a registered tax agent. They have the ability to lodge your return later than the 31st October, however you must have registered with them as a client before this cut-off date. Why not start looking around for one now if this is the method you choose, then you at least have crossed one off of your to-do list.
2. Get your deductions ready
If you have had any expenses that directly relate to your work, you may be able to claim deductions for them. Allowable deductions are very beneficial, because you can subtract these from your total income, enabling your taxable income to be reduced. Examples of what you can claim are provided by the ATO website and do depend on what your profession is. For example, if you are a cleaner, you can claim a deduction for protective clothing and footwear, whilst if you are a teacher, you may be able to claim certain motor vehicle expenses. Whatever the claim, you must be able to say yes to the following three points:
- You spent the money
- The expense does related to your job
- You can prove the expense with a receipt, bank statement or diary entry.
3. Get all your other required paperwork together
Aside from your deductions, there are a number of other documents you need to organise. Some of these you can’t obtain until June 30th, but to be organised make sure you know what you will need to collect and check now who you need to contact for them. If you have a list of who you need to contact, it will make it a very easy process once June 30th has arrived.
- Payment Summary from every employer or payer you received income from. These are generally issued by their finance office or similar office role, but ask now so you know who to follow up.
- Bank/Financial Institution statements. Check to see if you have online access, and if not, arrange it so you can simply download these after June 30th.
- If you have bought or sold any shares, you will need to provide the buy or sell advices. Ask your stock broker or investment adviser if they organised the transaction on your behalf.
- If you have received any dividend payments, then you must have copies of the dividend statements. Again, many of these you should be able to access online if you have access. Organise it now, so you can start collecting them.
- If you have a managed investment fund or units in a unit trust, you will need to obtain your statement of earnings from your accountant/financial adviser.
4. Get a system in place
As tax returns are required yearly, it’s worth getting a system in place to be organised, if you don’t already. Given the ATO can review your past tax returns, it is important that you keep all of your tax returns and supporting paperwork for the past for 5 years. A simple plastic storage box is one easy way to achieve this. For each year, put all of the paperwork into a waterproof folder and on the top have one that is ready for the coming tax year, so if you do receive any dividend statements, donation receipts etc. you can start putting them in a centralised place. We all know tax time is far from enjoyable because it takes time, but by following these steps we hope you can reduce the amount of time it takes you to get organised, and hopefully you even end up with a handy tax refund!