It’s nearly a new financial year in Australia, which means for many of us, it’s tax time. Admittedly, it isn’t the most exciting time of the year – in fact, it can be quite daunting – but if you’re organised and ready, it can be a little easier to navigate. And for some, it may even mean you get a little cash back! The key is to be organised and have all the information you need on hand. Plus, you’ll love feeling calm and in control when it’s time to do your taxes. Here are our top tips to help you out.
Start as you mean to continue (it’s never too late to start!)
Whether you work for an organisation or work for yourself, work from home or at a workplace, it’s important to set up a system so you can keep track of all your paperwork as you go. And if you haven’t done this already, now is a great time to start to get organised for the next financial year. Save time by storing all of your paper invoices and important documents in Folders or Document Wallets so everything is in one place for when you need it.
Keep track of your expenses
If you plan on claiming for your expenses for the year, ensure you are keeping your receipts organised and clearly labelled throughout the year (whether digital or paper receipts). And again, if you haven’t done this, you can organise them now as you still have a little time before tax time is here.
For your paper receipts, use Manila Folders or Display Books or any method that works for you, and label everything clearly. For digital receipts, keep them in organised digital folders and use a spreadsheet to keep track of your spending. That way when it’s time to work out your outgoings, everything will be in clear locations for you to instantly reference.
It’s also important to store and save these somewhere safe and secure, as generally, you need to keep your records for five years from the date you lodge your tax return. For more information on this (in Australia) be sure to check the Australian Taxation Office (ATO) resources below for detailed information on what records you need to keep, and for how long:
For individuals: https://www.ato.gov.au/Individuals/Income-and-deductions/Records-you-need-to-keep/
For businesses: https://www.ato.gov.au/Business/Record-keeping-for-business/
Do little and often
Rather than leaving everything to pile up for when tax time rolls around (don’t worry, we’ve all been guilty of this), make a regular appointment with yourself in your Diary or Calendar to maintain paperwork and any digital records throughout your year. Once a month, note down all of your expenses and sort through everything. And don’t forget to reward yourself for all of your hard work afterwards. After all, you deserve it!
Understand what you can claim
It’s a good idea to talk to a tax professional who specialises in tax for your industry so you have a good idea of what deductables you can claim (often their fee is tax deductable as well – be sure to check this first though).
Especially if your working arrangements have changed at all. i.e. you now work from home and you’ve had to purchase essential items such as essential stationery (yay!), a new laptop or other office and work supplies in order to complete your role. By seeking professional advice, you can be sure to only keep the receipts that you really need. Plus, you may even find out you’re eligible to claim deductions for more than you originally thought.
For more detailed information on what you may be able to claim, check out the advice from the ATO below.
For individuals: https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/
For businesses: https://www.ato.gov.au/Business/Income-and-deductions-for-business/
As with most things in life, the key is to be organised and gather as much knowledge as you can so you can easily navigate the end of financial year. Whether you’re an individual or a business, the ATO has plenty of resources to help you, and if you’re still feeling a little unsure of what you can and can’t claim as a tax deduction, be sure to get some professional advice.
Happy Tax Time!