Prepare for tax time with these five easy tips!
Although we all know that it will inevitably come around each and every year, tax time in Australia still catches many of us off guard. To make life easier for yourself and to take some of the hassles out of filing your tax return, there are few tax return tips you can follow ahead of time. Discover five easy tips for getting ready for tax time below:
If you’ve ever submitted a tax return, you’d know that one of the most stressful parts is simply ensuring that you have all the information you need on hand. Taking some time to get organised before tax time can help to make doing your taxes a little less intimidating.
Although you generally won’t be able to lodge your tax return early, you can start to gather all the information and documentation you will need once the time comes. Whether you plan on lodging your tax return yourself or will be paying a tax agent to do so, you’ll still need to be able to access information about your income, expenses and potential deductions.
Relating to the money that you earn throughout the financial year, income can take many forms, from your regular paychecks to the interest earned on your savings accounts. Some information that may be useful when completing your tax return can include:
- Payment summaries for any employment throughout the previous financial year
- Bank statements outlining the interest earned on your accounts
- Dividend statements
- Income earned from rental properties
- Details of any superannuation lump sum payments you’ve received
- Government payments or pensions
- Any allowances, such as travel, car and meal allowances, that you were entitled to throughout the financial year
- Details of any other income that you earned
In order to do your job, maintain a rental property, manage your tax affairs and perform a variety of other activities, you may incur expenses. Depending on your circumstances, some of these expenses may be tax-deductible. Some information that may be worth having on hand when completing your tax return may include:
- Any relevant work-related expenses, such as home office costs, uniform costs, travel expenses, motor vehicle expenses and the costs of professional development or self-education
- Other expenses that you incurred while earning income
- Details of any rental property expenses
- Any charitable donations made totalling more than $2
- The costs of managing your tax affairs through an accountant or tax agent
- Investment expenses that were incurred throughout the financial year, including financial advisor fees, bank fees and more
In Australia, there are two main options when it comes to preparing and lodging your tax return. You may choose to prepare and lodge it yourself, or you can pay to have an accountant or tax agent prepare it for you. Knowing how you’ll prepare and lodge your tax return is a handy tax return tip that can help you plan your schedule and give you enough time to make an appointment with an accountant or tax agent if needed.
If your tax affairs are quite straightforward, you might choose to fill out your tax return yourself. With a choice of a paper or digital form, you can use whichever you feel most comfortable using. Although it is free to file your own tax return, you do need to be careful that the information that you submit is accurate and that any deductions you claim apply to you and your profession. Doing your own taxes can give you the freedom to work through the form when it suits you, but you may need to read up on the latest guidelines to ensure you’re filling in each section correctly.
On the other hand, if your tax affairs are a little more complex, an accountant or tax agent may assist you in ensuring your tax return is completed in line with the latest tax guidelines. They can guide you through the process and may even suggest deductions that you weren’t previously aware of, helping to maximise your tax return. Without needing to familiarise yourself with the latest guidelines and your eligibility for different deductions, there’s likely to be less stress for you and more time to do the things you enjoy. Although you will need to pay for the services of an accountant or tax agent, their fee is tax-deductible and can be claimed as a deduction in the following financial year.
When is tax time in Australia?
For individuals, tax time in Australia starts on the 1st of July and generally ends on the 31st of October. These dates may vary depending on your circumstances and how you choose to lodge your tax return.
When does your tax return need to be lodged?
Whether you choose to prepare your tax return yourself or plan to pay an accountant or tax agent to do it for you, it’s very important to take note of when your tax return is due. Not only will this help you to avoid any unwanted fines, but this tax return tip can also help to reduce some of the stress that surrounds tax time.
Lodging your tax return yourself
If you decide to lodge your tax return yourself, you will need to have done so by the 31st of October. If the 31st of October coincides with a weekend, your tax return will be due on the next business day. If you do miss the deadline for one reason or another, it’s important to lodge your tax return as soon as possible.
Using an accountant or tax agent
Accountants and tax agents tend to have their own special lodgement schedules, meaning that your tax return won’t necessarily need to be submitted by the 31st of October if you will be paying them to prepare your return. You will, however, need to have engaged them before the 31st of October to be eligible for a later lodgement date.
No matter how you plan on lodging your tax return, having an idea of what may and may not be tax-deductible can make preparing for tax time easier. By understanding what kind of deductions are relevant to you, you can look to keep track of any deductible expenses by keeping receipts and taking note of other costs as they accumulate. You might choose to keep your receipts in a dedicated box or folder, or may find that an app, such as myDeductions, works better for you.
While there are many different types of deductions, some of the most common deductions are work-related expenses. What you’ll be eligible to claim as a deduction will vary depending on your occupation, but they may include expenses such as:
- Home office expenses
- Travel expenses
- Vehicle expenses
- Clothing and laundry expenses
- Self-education expenses
Throughout the financial year, try and get into the habit of keeping track of your expenses and filing away your receipts for use at tax time. Even if you end up being ineligible to claim the expense, the receipt takes very little time to file away and takes up next to no space.
Before you get started on your tax return, it’s important to always check that the basic information that the ATO holds is correct. From your name and address through to your bank details, ensuring that this information is up to date can prevent any unnecessary roadblocks in receiving your tax refund. The easiest way to check this information is to log into your myTax account and look at each of the fields contained in the contact and bank details sections.
You should look to check the following information is up to date:
- Your full name
- Your address
- Your date of birth
- Your bank account details
- Your contact details or the details of your authorised contacts
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