Tips To Help Prepare For Tax Time

Even for the well-organized homeowner, tax season may be an extremely stressful time. But there's no need to be concerned since we've got your back! This helpful guide will provide you with all of the pointers you require to make filing your taxes a pleasure. We will guide you through the entire procedure, from the initial step of gathering your documentation to the final stage of itemising your deductions. Therefore, take a seat, put your feet up, and allow us to handle everything else.

The filing of taxes is one of those tasks that the majority of people attempt to avoid doing. On the other hand, it is essential to keep in mind that filing taxes may really present a favourable opportunity to receive a cash refund. Read on if you want some advice on how to get the most out of your time spent preparing for tax season. This article on the blog will provide you some useful information on what you need to do in order to make the process as easy and stress-free as it possibly can be for you.

When it comes to getting your taxes prepared, do you find that you are one of the many individuals who put it off until the last minute? If so, you're not alone! However, you shouldn't worry because we have some suggestions that will make the process a little less intimidating. You can reduce the amount of stress you feel and still finish your taxes on time if you follow these easy guidelines. What exactly are you looking forward to?

Advice For Getting Ready For Tax Time

You can get ready for the new fiscal year by doing things like making contributions to your superannuation account, prepaying your bills, and reviewing your goals for saving money, creating a budget, and investing your money.

Increase Your Super Fund Deductible Contributions

It's possible that now is the best moment for you to start making contributions to your superannuation, whether they're further personal concessional payments or employee salary sacrifice contributions. Contributing such an additional amount could help you decrease your overall tax liability, in addition to adding to your retirement savings account.

You are eligible to take a deduction on your taxes for personal contributions if you are younger than 75 years old. It is important to note, however, that these contributions are subject to the concessional contributions cap, which is managed by the Australian Taxation Office (ATO), as well as certain additional requirements for individuals who are between the ages of 70 and 74. (inclusive).

Prepay Expenses

You might be able to claim a tax deduction for some expenses in the same year that you incurred them if you prepay tax-deductible expenses for the following fiscal year. This allows you to claim the deduction in the year that the item was incurred. Please consult the ATO for any additional information you require concerning expenses that have been pre-paid.

Take Charge of Your Investments

If you are considering selling any investments, such as shares or managed funds, the timing of the sale can have a major impact on the amount of tax that you might be required to pay in any given year.

This is due to the fact that any gain on your investment is considered taxable income. Depending on the size of the gain, you may be moved into a higher tax bracket as a result of this.

If, on the other hand, you intend to sell a non-performing investment, you should do so before the 30th of June in order to increase the likelihood that you will be able to apply any capital loss to offset the tax liability associated with any other capital gains.

Think About Getting Private Health Insurance

For any portion of the fiscal year during which they did not have appropriate private patient hospital cover, individuals and families with incomes that are above a certain threshold may be required to pay the Medicare levy surcharge, also known as the MLS. This is the case if the threshold was exceeded. The MLS comes on top of the 2% Medicare levy already in place.

However, if you and your family sign up for an adequate amount of hospital coverage through a health fund that is recognised, you won't have to pay the additional fee.

Begin a Savings Strategy

Establishing a savings plan can be an effective way to foster positive behaviours and give you a sense of control over the process of amassing the resources you might require in the future to maintain the standard of living you envision for yourself.

Think about establishing a regular transfer into an investment that takes place automatically after you receive your salary – that is, before you spend any of your income. This can be done by setting up a recurring transfer into an investment.

For instance, this so-called "investment" could be a savings account with a high interest rate, which gives you the opportunity to benefit from the effectiveness of compound interest.

Alternately, if you have a mortgage, this could involve depositing additional funds into an offset account, which would result in a reduction in the amount of interest that you are responsible for paying on the loan.

Avoid Delaying Budgeting

Creating a budget does not have to include a complicated collection of spreadsheets. You should be able to compare all of your usual expenses, such as payments on a rent or mortgage, insurance premiums, and an estimate of how much you spend on groceries and gasoline each week, to the amount that you earn in a span of 15 minutes.

It is possible that it will not be correct one hundred percent of the time, but it will provide a solid overall picture of how much money is coming in and how much money is going out, as well as how much money you should be able to save.

Deal with Your Debt

If you have any personal debt, paying it off and resolving not to accrue any further debt in the new fiscal year could be an essential resolve for you to make. For instance, one method could consist of consolidating your debt and making a firm commitment to paying it off within a specified amount of time.

If you already have a mortgage, raising the amount that you pay back each month as well as the frequency with which you pay it can be beneficial and, in effect, give you a risk-free return on your investment by allowing you to save a large amount of money on interest payments.

Assemble All Of Your Documents In One Location

The more organised you are, the less stressful the procedure will be for you, and the greater the likelihood that you will maximise the amount of deductions available to you. You won't be able to get the most out of your costs unless you keep detailed records and keep all of your receipts. Make sure that you gather all of your documentation in one location so that you can prevent unnecessary back and forth with your accountant.

Even though each person's circumstance is different, as a general rule, the following documents should be obtained before you begin:

• A copy of the tax return from the previous year
• Transaction history for any shares, businesses, or properties that have been bought or sold
• Specifics of a private health insurance plan
• Spouse information (if applicable)
• Information on the children, including their birth dates
• Detailed accounting of all income, including income statements, income from rentals and other investments, interest and dividends, and any income from outside the country
• A list of all expenses, including those linked to job, gifts, and expenses for furthering one's own education, as well as the cost of managing one's tax affairs

You or your accountant may be able to get some of this information from the ATO. Examples of this type of information include income statements, details regarding payments made by Centrelink, and information about private health insurance.

Aside from refunds, the ATO is tightening down on questionable deductions, which means that if you intend to claim it, you need to be able to verify that you are entitled to it.

List Any Costs Associated With Your Work

Whether you work as a chef, a carpenter, or a copywriter, every job has a list of tax deductions that are unique to that profession. There is a good chance that you can get reimbursement for some of the costs associated with your place of employment. These might include things like car expenditures, uniform costs, mobile phone bills, and even union dues. Think about any items you've bought that are related to your employment or that help you perform your duties more effectively. It could be equipment that you use on the job, or it could be a membership to a newspaper that is specific to your sector. If the item is closely related to your job but your employer did not reimburse you for it, you may be able to write it off as a business expense.

Pick a Filing Method for Your Tax Return

When you have finished collecting all of your information, the next step is to think about how you will submit your tax return. You are free to file your return of income taxes on your own if you choose to do so through the internet system. We will provide you with tax guidance and suggestions at various points throughout the preparation process to ensure that you collect the most money possible from your refund.

Choose the Online Tax Adviser service if you anticipate that your tax return will be somewhat complex or if you believe that you will benefit from additional guidance from a tax professional. Comparable in speed, simplicity, and adaptability to our Online Tax Express service, with the added benefit of having our tax professionals handle all of the laborious work on your behalf. With Online Tax Adviser, all you need to do to get your returns prepared is upload your personal information and tax documents, and we will do the rest, including maximising your refund and submitting everything through our user-friendly and protected online portal.

Consult Professional Advice

According to the statistics, 74% of Australians seek the assistance of a tax agent while preparing their tax returns. It is always in your best interest to seek the guidance of a professional, as even information that appears to be unimportant to you could have a direct bearing on the tax return you file. Even while you might believe that handling your own taxes will save you money, doing so might instead cause you to lose out on deductions that you are eligible for. Expert guidance is both convenient and inexpensive because it is offered in a variety of packages and pricing points to accommodate a wide range of tax payers and income levels.

Organise Your Documents

When it comes to getting ready for tax season, the more organised you are, the less stressful the process will be for you, and the more likely it will be that you will get the most deductions possible.

Begin by compiling all of your financial documents and receipts, including the following:

• A copy of last year’s tax return.
• Keeping detailed records of any transactions involving the sale or purchase of shares, businesses, or properties.
• Information pertaining to private health insurance plans.
• Your spouse's information (if applicable).
• Information about the children, including their dates of birth.
• A complete accounting of all of your revenue, including payment summaries, income from rentals, interest, and dividends, as well as any income from other countries.
• A list of all of your expenses, including those related to your work, donations, your own education, and the fees charged by your accountant.

If you worked from home at any point during this fiscal year, you should make sure you have everything you need to claim a deduction for the costs associated with your home office so you may save money. As a response to COVID-19, the Australian Taxation Office (ATO) has introduced a simplified process for claiming deductions beginning with the 2020-2021 fiscal year.

You are eligible to receive eighty cents for every hour that you worked from home during the course of the year if you use the shortcut approach, but you are required to keep a record of the hours that you worked from home using timesheets, a roster, or a diary. Read on for further information.

Prepay Expenses In This Financial Year

If you anticipate that your income will be lower in the following fiscal year, you may be able to increase the amount of your tax return for the current fiscal year by paying for any expenses you have before the end of June. This way, these expenses will be accounted for as part of the tax deduction for this year.

You are only eligible to get reimbursement for work-related expenses if you can prove that you actually incurred the expense yourself and that it was directly connected to the production of your income. If your claim for costs linked to employment is more than $300, you will be required to present proof of these expenses; therefore, you should make sure that you have all receipts on hand well before the time comes to file your taxes.

Proposed Budget for the Upcoming Fiscal Year

It is a good idea to create a budget for the new fiscal year so that you can get a handle on your expenditures and make progress towards accomplishing your monetary objectives. A good tool for financial planning is a monthly budget, which enables you to predict how much money you will spend or save each month while also keeping track of your typical spending patterns. Creating and sticking to a budget is an essential step in maintaining order in your personal finances.

Advance During Tax Season

It has been an unusual year, and as a result, many of us have had to adjust the way that we go about our daily business as a result. It is possible that, in addition to any drops in revenue, there were also increases in expenses that were related to working from home. Therefore, if you want to avoid any surprises when it comes time to file your taxes, it is a good idea to start getting organised right away.

Utilising A Record-Keeping Program

Maintain a record of your electronic records by using the myDeductions tool that is included in the ATO app or by using one of the many popular software programmes that offer downloadable mobile apps that can assist you in maintaining records in an efficient manner.

You can get a free copy of the myDeductions app from the app store, which you can then install on any mobile device you own. Keeping tabs on the following is made possible by the application:

• all costs associated with one's employment (including a logbook feature for car trips)
• the deductions for interest and dividends
• donations of money or goods
• expense incurred in the management of tax matters
• additional inferences.

Keep in mind that any and all of the physical records you maintain can be scanned and saved electronically (including photos of your receipts).

Using myTax, you can electronically submit your tax return to the government. In order to get started, you will need a myGov account that is linked to the ATO online services.

Online booking of lodging is convenient, uncomplicated, and risk-free. In late July, when most of your information has already been automatically included in your tax return, which may include your income, bank interest, health fund details, and details of any government payments, this is the best time to file your taxes. You only need to verify that the information is accurate and add anything that is absent from the list.

Tips For Filing Your Tax Return

As we move closer to the month of July, a significant number of taxpayers are confronting the reality that they need to file their annual income tax return.

Select How to File Your Return

In practise, this means choose one of the following options between doing it yourself and working with a tax agent:

• Using a tax agent: About three quarters of Australians, or 74%, use some kind of real estate agent. There is a price involved, but your return will be prepared swiftly and precisely, despite the fact that the amount is not tax deductible. The vast majority of individuals view this as a stress-free alternative. Make an appointment in order to guarantee that you will obtain a time that is convenient for you.
• Self lodging: The online tax return service ensures that a licenced tax agent verifies your return for accuracy before it is sent to the ATO, decreasing the chance of major errors and the repercussions that come along with them. This service is available for people who still wish to self-lodge their taxes. We recommend the use of the Online Tax Adviser tool for self-lodgers whose financial situations are more complicated. With this tool, a virtual tax agent works with you to guarantee that you claim every deduction available and get the highest return possible on your taxes.

Prepare All of Your Necessary Paperwork

In spite of the fact that we are all unique individuals, it is possible to make some broad statements regarding the kinds of documents you might want to compile before you begin the process of filing your tax return. These are simply some general pointers to keep in mind, and not all of them will apply to everyone:

• Copy of last year's tax return
• Transaction history for any shares, businesses, or properties that have been bought or sold
• Private Health Insurance Details
• Spouse Details
• Children's details, including D.O.B

Income

• Statements of earnings from all of the jobs you've held in the past 12 months
• Statements of bank interest that detail the amount of interest money obtained from the bank
• Payments from the government, such as pensions
• Superannuation lump sum payments
• Allowances (Car, travel, entertainment, meals etc.)
• Employee stock ownership programmes
• Dividend Statements
• Foreign income
• Rental property income
• Business income
• Any other income earned

You or your accountant may be able to get some of this information from the ATO. Examples of this type of information include income statements, details regarding payments made by Centrelink, and information about private health insurance.

Expenses

• Work-Related Expenses:
• Motor vehicle, including an estimate of the number of kilometres driven if there is no logbook kept; if there is a logbook, the details of any expenses incurred are included.
• Travel (fares and accomodation) (fares and accommodation)
• Uniforms/work-wear
• Education of oneself and advancement in one's vocation (seminars, conferences, etc.)
• Charges for joining the union, including registration and subscription costs.
• Home office expenditures
• Costs associated with computers, telephones, and the internet
• Other expenses involved in the production of income
• Insurance that protects against loss of income
• Specifics on the acquisition of any assets (with the split between work and private use)
• Investing costs include fees charged by banks and financial consultants, as well as fees charged for borrowing money to invest.
• Expenses Related to Rental Properties For instance, rates, body corporate costs, agency fees, interest on loans, repairs and maintenance (both inside and outside), travel, water rates, a depreciation plan, and other other expenses.
• Expenses incurred in the management of tax matters
• Donations to charity that are greater than $2