Like it or not, tax time is almost upon us again. For many it is a painful time of the year but it doesn’t have to be. You can reduce the pain by following a few simple tips.
- If you don’t use an accountant to do your tax then you should be. Their fees are more often than not covered by the extra refund they can legally get you (or by the reduction in the tax payable they achieve). They know what you can and can’t claim and you would be surprised at just how much you may have missed claiming over the years.
- Start digging through your filing cabinets and shoeboxes full of receipts now! Don’t leave everything to the last minute.
- Find every receipt you can that relates even slightly to your work. Let your accountant tell you whether or not you can claim it. That is their job. As a simple rule of thumb, if you had to buy something to help you do your job, then 99% of the time you can claim it.
- Now that you have dug out your receipts, start a new and better filing system TODAY. Even if it is a simple plastic sleeve for each month where you can put all your work receipts, if you start now, come 1 July, you will already be 3 months into your new system and less likely to stop using it.
- If you use your mobile phone for everything, then consider taking photos of your receipts and saving them in ‘The Cloud” in a free Dropbox or Evernote account. Or you could use a program like Shoeboxed, which after you take a photo of your receipt will transcribe it into a simple spreadsheet ready for your to give to your accountant at year end.
- When you go in to see your accountant, ask questions. Every industry has specific things that can be claimed and so it is important to tell your accountant your current job role. Then ask them what things you can claim. Often this discussion will help you remember things you may have bought that you couldn’t find a receipt for.
- If you have had medical expenses this year, out of pocket medical expenses over $2000 can be claimed. This includes medical, dental, optical and most other therapy treatments which have been used after referral by a doctor. You can request an annual statement off Medicare to show you your out of pocket expenses and if your have private health insurance they should also send you an annual taxation statement.
- If you have kids at school, don’t forget to dig out school related expenses so that you can look at claiming the Education Tax Offset. Again, take every receipt into your accountant and let them tell you what you can and can’t claim.
- If you have a company car, remember to record your odometer reading at 31 March for Fringe Benefits Tax purposes.
- If you claim your car as an expense, remember to record your odometer reading at 30 June.
- If your bank doesn’t give you regular statements, get them to start sending you electronic monthly statements so that you will have all of your bank interest details in mid to late July.
- Finally, go and see your accountant early and be prepared. Ask them to send you a fact sheet or questionnaire before your meeting which will prompt you to bring everything you need first time.
So these are just a few helpful ideas to make tax time less painful. In actual fact being prepared and ensuring you claim everything you can, can mean that you could get a nice little windfall before Christmas. So if you are expecting a refund, get in early as the money is better in your back pocket that the Government’s!