As tax time looms large again, we’re sharing our top tips to help you stay cool, calm and in control.
Avoiding the tax time tailspin
Whether or not you’re across the basics when it comes to your individual tax, your obligations from a business standpoint can vary significantly and it’s important to stay informed in order to minimise your tax liability. Regardless of your personal situation, employment or level of income, tax can often be one of those things that tend to fall to the wayside throughout the year, resulting in a tax time tailspin that can cause undue stress and pressure.
If an impending tax deadline is enough to send you into a cold sweat, we’ve compiled a list of handy hints to help you to stay organised to save time, effort and money and alleviate those all too common tax time terrors.
Consider engaging a registered tax agent
Utilising the services of a registered tax agent or accountant could change your whole perspective on tax time. Having a professional involved, will also make sure you’re ticking the boxes in terms of compliance to avoid running into any nasty surprises down the track. They will also be able to advise you on any issues you may have and help you to minimise your overall tax liability, and best of all – their fee will be tax deductible for next year.
Find your tax groove and stay organised
If you’ve ever found yourself in a state of receipt and statement induced turmoil come tax time, you’ll probably be willing to implement some simple measures to avoid being in that position again. Try allocating some time every month to get your records in order, ensure invoicing and payments are up to date and reviewing and filing any relevant bank statements. Setting up a cloud-based system that you scan everything into can be a good way of managing, organising and storing the paperwork – without the icky files and folders needed to comply with the current record keeping obligations stipulated by the ATO.
Although it sounds simple, making the monthly commitment to maintain good records can prove difficult as mounting priorities appear. Just remember, making small and regular efforts to stay organised can pay dividends in terms of saving you time and stress in the long run.
Keeping expenses separate
Separating your personal and business bank accounts could make life easier when it comes to identifying and tracking business expenses. Setting up a business credit card or a business transaction account should be an easy process and may be all you need to draw a clear line between your business and personal transactions which will, again, save you time when it comes to preparing your tax.
Break it into BAS sized chunks
If you do happen to be in business, completing your Business Activity Statement is unlikely to be your favourite thing to do. However, think of it this way – completing your BAS every quarter is a great way to regularly track your income and expenses, and organising your receipts. If you are organised with your BAS, preparing for tax time will be a whole lot easier as a lot of the work has already been done, and you’ll feel more in control of the situation knowing exactly where you’re at and learning where you could improve for the next quarter.
Stay informed and be strategic
Have you considered if you’d be eligible for deductions for your home office? Do you know what your tax bracket is and how much tax you are likely to pay? Have you, or can you, utilise the instant tax write off for purchases under $20K? It pays to do some top-level research and understand your position in order to make informed, strategic decisions about your business both now and into the future.
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