There's a certain mania that overtakes people around the end of the financial year. Accountants run around in world of their own, numbers running through their heads at a hundred miles an hour and people scramble to remember where they left that shoebox full of receipts that they were always going to organise but never got round to. it's a time of great stress for a lot of people as they panic at the last minute, but we've put together a list of tips to help you get through tax time without feeling the need to pull your hair out!
Plan Ahead
While it sounds simple, planning ahead for tax time is surprisingly difficult. While people start fresh with the best intentions, they quickly lose their steam and the organisation required to be fully prepared for tax time tends to go out the window. To combat this, put in a solid effort every day until keeping receipts organised becomes a habit, rather than a chore. It takes a few weeks, but if you make the effort straight off the bat, you'll being sensible and organised habits before you know it.
Make Purchases, Donations and Investments With Tax in Mind
Your accountant is a wealth of resource on all types of financial issues, but people tend only to turn to them in the months of June and July. Consulting your accountant before you make major purchases,. investments or donations is an excellent practice to get into---by structuring something just a little differently you could save yourself a lot of money when the end of the financial year rolls around!
Get in Early
Tax accountants become incredibly busy around June/July, so it's important to book in early to see them if you want to get in without a wait. In order to make the paperwork and administrative tasks a lot easier, familiarize yourself with all the documentation you'll need to collect to submit your taxes for that financial year. Often minor changes occur from year to year in terms of additional levies and charges, so make sure you're up to speed on what you'll be liable for.
Never Understate
While it's important to find ways to reduce the amount of money you owe the taxman where possible, never be tempted to overstate your deductions, or understate your income. According to an article on News.com.au:
The Australian Taxation Office uses data matching to check the income reported on your return.
HLB Mann Judd managing partner Steven Toth says this includes income from employers, banks and other financial institutions, share registries, and state and federal government agencies.
The ATO expects to cross- match more than 400 million financial transactions with tax returns this year. Last year data matching found more than 500,000 income discrepancies.
"If you have understated your taxable income and paid too little tax, the penalties can be quite severe," Toth says.
Plan Ahead
While it sounds simple, planning ahead for tax time is surprisingly difficult. While people start fresh with the best intentions, they quickly lose their steam and the organisation required to be fully prepared for tax time tends to go out the window. To combat this, put in a solid effort every day until keeping receipts organised becomes a habit, rather than a chore. It takes a few weeks, but if you make the effort straight off the bat, you'll being sensible and organised habits before you know it.
Make Purchases, Donations and Investments With Tax in Mind
Your accountant is a wealth of resource on all types of financial issues, but people tend only to turn to them in the months of June and July. Consulting your accountant before you make major purchases,. investments or donations is an excellent practice to get into---by structuring something just a little differently you could save yourself a lot of money when the end of the financial year rolls around!
Get in Early
Tax accountants become incredibly busy around June/July, so it's important to book in early to see them if you want to get in without a wait. In order to make the paperwork and administrative tasks a lot easier, familiarize yourself with all the documentation you'll need to collect to submit your taxes for that financial year. Often minor changes occur from year to year in terms of additional levies and charges, so make sure you're up to speed on what you'll be liable for.
Never Understate
While it's important to find ways to reduce the amount of money you owe the taxman where possible, never be tempted to overstate your deductions, or understate your income. According to an article on News.com.au:
The Australian Taxation Office uses data matching to check the income reported on your return.
HLB Mann Judd managing partner Steven Toth says this includes income from employers, banks and other financial institutions, share registries, and state and federal government agencies.
The ATO expects to cross- match more than 400 million financial transactions with tax returns this year. Last year data matching found more than 500,000 income discrepancies.
"If you have understated your taxable income and paid too little tax, the penalties can be quite severe," Toth says.
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