It’s amazing how quickly tax time rolls around. One minute you’re buying gifts for Christmas and enjoying the Australian summer, and the next it’s time to exercise your brain as you try to recall how many kilometres you’ve travelled on work business and what defines a uniform deduction.
We understand the anxiety that this annual obligation can cause and, with new regulations being introduced every year, taking some simple steps early can help to put your mind at ease.
The all too familiar story
It’s 6 pm, 20 June, in a nondescript house in the suburbs. Tad and Jess – both in their early 20s – recently decided to save costs by becoming housemates while they each further their careers.
After only remembering to file their tax returns on the 31 October deadline last year, the pair made a pact that they would sit down and organise their documents together well before the next end of financial year.
However, Tad, who works as a chef, is slumped on a couch, a shoe box at his feet, with a bewildered expression on his face as he tries to make out the details on a receipt. Meanwhile, trainee accountant Jess is scrolling through her iPhone, pulling up copies of receipts from emails over the last 12 months.
The friends are intensely absorbed in the numbers, desperately trying to retrieve receipts and remember expenses so that they can lodge their paperwork with their tax accountant in July. However, failing to account for expenses and saving receipts throughout the year can be extremely costly come tax time (both in time and money).
It’s easier on your mind and body if you maintain your financial records throughout the year.
How to store your documents the traditional way
Many of us still prefer to keep our records in paper format. Unfortunately, an explosion in the use of thermal printers by retailers has led to problems with the ink fading out on receipts.
A good way to keep your records straight is to have a filing system where you add to it regularly throughout the year. Never store it in plastic sleeves, as this could damage the paper, and always have a back-up copy.
One idea is to scan your documents monthly and to check your credit and debit card statements to ensure you have proof of purchase.
Prefer to go digital?
Australians are some of the biggest consumers of smartphone data on the planet and, as a result, much of the way we live our lives have become digital.
Need to order pizza? There’s an app for that. Have the urge (but not the cash) to go bowling? There’s an app for that too.
One way that digital technology can help in preparation for tax time is you can photograph and keep a copy of your receipt. There are many apps for this available on Android and iOS systems including the Australian Consumers Corporation (ACC) shopper app which allows you to photograph and store your receipts and also provides consumer information.
If you do decide to go the digital route, we strongly recommend backing up your files regularly by saving them to the cloud.
How we can help you
If you’re searching for a qualified and experienced accountant, Business Tax & Money House (BTMH) can assist you with your tax needs.
The BTMH team is experienced in managing personal and business tax returns. We can also help with all transactional tax planning, including property purchasing, dealing with capital gains tax, asset protection and current and future tax obligations and minimisation, as well as ongoing management of your tax affairs.
Are you sick of paying too much tax?
Do you pay too much tax? Are you unsure of where your finances are, or whether you can claim certain deductions?
If you’re new to us, contact us for a complimentary tax review to find out how much we could save you in fees and taxes.