Getting Ready for Tax Time

Are you preparing yourself for the upcoming tax season? There are a number of things you can do to make it less difficult, despite the fact that it could be a lot of work. First things first, make sure you have all of the necessary information from the previous year and also assemble all of your records. You should also start thinking about any deductions or credits that you might be able to claim when it comes time to file your taxes. Also, make sure you file your tax return in a timely manner. Tax time doesn't have to be stressful if you just do a little bit of planning ahead of time.

Are you, Australia, getting ready for the upcoming tax season? If you plan ahead and get yourself organised, completing this chore won't be quite as difficult as it may otherwise seem. The following are some suggestions that will assist in making the process run as smoothly as is humanly possible. First things first, compile a list of all the required documents. This can contain your income statements, receipts, and GST reports, in addition to any other paperwork associated with your tax return.

Next, check that you are aware of the due date for your return, and get a head start on preparing it by beginning work on it well in advance. Finally, if you feel you need it, get some assistance from a trained specialist. A competent accountant can handle everything for you and ensure that you get the maximum money possible from your tax return. This service is provided at no additional cost to the client. Don't worry about it; all you have to do is follow these easy instructions, and you'll be good to go!

Getting Ready for the Annual Tax Season

In case you hadn't seen all of the advertisements for 'EOFY' deals and charity fundraising efforts, here's a reminder: it's almost the end of June, which is also the time of year when taxes are due.

Assistant Commissioner Kath Anderson of the Australian Taxation Office gave a talk in which she discussed ten things that may be taken right now to make the job less intimidating.

Please Submit Any Tax Returns That Are Past Due

It is never too late to file old, delayed tax forms; even if you have forgotten your tax returns for several years in a row, you can still do so. In point of fact, compliance is required.

It is not acceptable to not check in, and everyone is responsible for paying their fair part. And we are able to determine who has and has not submitted an application.

You have the ability to self-file your tax returns for the preceding three years on the MyTax website. In any other case, seek assistance from a tax agent. The sooner you get it done, the lower the probability that you will be penalised for it.

Prepare Your Records for Review

Determine which sources of income, such as salary and wages, income from shares, and capital gains from assets like real estate, you are required to report in order to comply with the law.

Gather all of your logbooks, receipts from work-related expenses, and receipts for charitable contributions into one place.

Utilise the ATO Calculators to Accurately Determine Your Expenses

Utilise the tools and calculators provided on the website of the ATO in order to determine expenses that may be a bit more complicated, such as the laundering of uniforms and goods used in a home office.

Check to See If Your Claims Will Be Accepted

Be sure that the expenses you intend to claim can be reimbursed by the ATO in order to avoid incurring any fines.

There are three cardinal rules that must be followed by anyone who is attempting to claim a deduction. The first need is that you must have spent the money and not been reimbursed for it; the second requirement is that the expense must be related to earning your income and cannot be considered private; and the third requirement is that you must have a record of the transaction (a receipt).

Pick a Filing Method for Your Tax Return

If both your income and your expenses are pretty straightforward, filing your tax return on your own could not be too difficult for you. Use the MyTax website in order to accomplish this.

If you are going to use an accountant for your taxes, check to see if they are registered.

Make a Decision on When You'll Check In

Despite the fact that many individuals prefer to file their taxes early in the year in the hopes of receiving their return as quickly as possible, there is a potential drawback: those who file their taxes early frequently have a tendency to miss some information.

If you are preparing your taxes on your own, the ATO recommends that you wait until the middle of August before submitting your return. At that point, the ATO will already have a significant amount of information on your income, which will simplify the procedure.

Check to See if There Are Any Items That Are Tax Deductible That You Have Forgotten About

The majority of people are aware that they can claim deductions for charitable contributions and for work uniforms, but there are other, less common items that can be claimed as well.

The following are some examples of these:

• insurance that protects against loss of income
• mobile phone fees associated with business calls
• instant asset writeoffs for small businesses
• stationery that was purchased for work purposes but will not be refunded by the employer.

The three golden criteria are still in effect: you must have paid for the item, it must only be used for work, and you must be able to prove it with records or invoices. All three of these requirements must be met.

Keep in mind that we will investigate it if it is not typical in some way. One taxpayer once asked his family and friends to preserve their receipts and send them to him; nevertheless, he was in violation of the first golden rule because he hadn't actually paid for the item himself and hence wasn't eligible to receive a receipt for it. In addition to this, we are going to check with your employer to be sure that incurring those charges was absolutely necessary for you to do.

Get a Head Start on Next Year with MyDeductions

Using the MyDeductions app to keep track of your expenditures throughout the year is something that Kath recommends you do if you want tax time to be even less stressful the next year. It eliminates the need to search behind the car seat in July for receipts that are now nine months old and wrinkled.

Save Money Throughout the Year to Avoid a Tax Bill Sting

It is advisable to set some of the money you make from investments or other sources, such as shares, away periodically during the year. If you do this, any tax bill that you receive won't come as a surprise to you.

Choose How You Will Use Your Refund!

Now comes the exciting part: if you believe you may be eligible for a tax refund, you must pick how you will spend the money. For instance, it might be a wonderful opportunity to get a new wardrobe, go on vacation, or help you pay off some debts; but, you might also be able to spend it on some new equipment for work, which you can claim as a deduction on your tax return for the following year.

How to Prepare for Tax Season

The finest of us faced a lot of difficulties in the year 2020. The effects that Covid-19 had on the world were completely unparalleled. The year 2020 began with a number of disasters for Australia, including bushfires, drought, lockdowns, and floods. These events have had a significant impact on people's personal lives as well as enterprises of varying sizes around Australia. To begin, some of the modifications that were made to the economy included JopbKeeper and an increase in the flow of cash. Because of these inconsistencies, come tax season 2021, there are certain important things to keep in mind when it comes to submitting your tax return. These things are related to the filing of your tax return.

Business Concessions

There is a possibility that your small business could be entitled for some business concessions, such as the instant asset write or immediate deductions for expenses that have been pre-paid. In the event that you are running low on time, another option available to you is to make an estimate of your trade stock rather than carrying out a stock take.

Expenses Relating to Motor Vehicles

Depending on the nature of your company and the kind of vehicle you have, you may be able to deduct the cost of your vehicle using either the cents-per-kilometer or the logbook approach. For instance, if you run a franchise as a sole trader or partnership and the vehicle in question is a car, you will be able to choose between the two methods. On the other hand, if you run your franchise as a corporation or trust, the only method you will be able to claim is the actual cost method.

Cars are defined for the purposes of taxation by the Australian Taxation Office (ATO) as motor vehicles, including four-wheel drives, that are designed to carry both a cargo of less than one tonne and less than nine passengers. This definition includes four-wheel drives. Other sorts of vehicles include motorbikes and those designed to carry one tonne or more (like certain utes) or nine people or more (like a minivan), respectively. One example of the latter is the automobile.

Expenses like as gas and oil, repairs and maintenance, interest on a loan for a motor vehicle, payments made towards a lease, insurance premiums, registration fees, and depreciation are all eligible for reimbursement.

A Business Run From Home

If you have a home-based business, you can deduct the proportion of your operating costs that corresponds to your business. What you can claim and how you can claim it are both determined by the structure of your firm. Occupancy expenses such as mortgage interest or rent, council rates, land taxes, and house insurance premiums are all eligible for reimbursement, as are operating expenses such as energy, phone, loss in plant and equipment value, furnishings, maintenance, and cleaning. It's possible that you can deduct some of your business travel expenses.

Claim the flat rate of 80 cents for each business hour, which could be beneficial to some individuals. This simplified procedure can be utilised beginning on March 1, 2020 and continuing through June 30, 2021. This pricing accounted for both occupation and running expenditures; however, there will be no further claims accepted.

Business Losses

In the event that your company had losses during the current fiscal year, those losses can be carried over to subsequent years and used to justify tax deductions. If you are a sole proprietor or an individual partner in a partnership and you satisfy certain conditions, you may be eligible to deduct losses from the current year against gains from previous years. If the loss is tied in any way to illegal business activity, you are not allowed to claim a tax loss deduction for it.

Your company's organisational structure will determine whether you can offset the loss and claim a deduction for it in the current year or if you will be required to carry forwards the loss and claim a deduction for it in a subsequent year.

Eligible corporate entities with a turnover of less than $5 billion in a relevant loss year are able to carry back losses made in the 2019–20, 2020–21, 2021–22, and 2022–23 income years to a prior year's income tax liability in the 2018–19, 2019–20, and 2020–21 income years and claim a refundable tax offset in their company tax returns for the years 2020–21, 2021–22, or 2023. This option is only available to corporate entities

JobKeeper

Your payments from JobKeeper are considered taxable income, and you are required to report them as such when you file your tax return. Your payments from JobKeeper have to be reported to the ATO as part of your personal income tax return because you are a sole proprietor. It is required that your partnership, trust, or company include JobKeeper as part of its reported business income.

Recepts, Receipts, Receipts

If you claim a tax deduction, you must be able to support your claim. You need to be able to provide evidence that supports your claim, in addition to having already paid for the expense in question. The Australian Taxation Office (ATO) has the right, for up to five years from the date the expense was incurred or the date your tax return was submitted, to ask you for proof of your expenses in the form of receipts and other documentation. Electronic copies of records are permissible so long as they provide an accurate and unmistakable image of the paper version. Be sure to retain a backup copy just in case the electronic copy becomes corrupted. In the case of invoices and receipts issued in a foreign country, all records should be in English or be easily able to be converted into English.

Increase Your Superfund 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 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 those who are between the ages of 70 and 74. (inclusive).

Prepay Expenses

You may be able to claim a tax deduction for some expenses in the same year that you paid the charge if you prepay tax deductible spending for the following fiscal year. This is done by paying for those expenses using pretax dollars. 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. Furthermore, the size of the gain may cause you to be placed in a higher tax bracket than you were previously.

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.

This so-called "investment" could, for instance, take the form of a high-interest savings account that enables you to take advantage of the potency of compound interest.

Alternately, if you have a mortgage, this could entail placing additional money into an offset account. Doing so will result in a reduction in the amount of interest that you are responsible for paying on your 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 for your rent or mortgage, insurance, and an estimate of how much you spend on groceries and gasoline each week, to the amount that you earn in a span of fifteen 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.

Having A Calendar On Hand

When it comes to filing your taxes, your calendar will be your most reliable ally. In order to get things rolling, the first thing you need to do is make sure you are on top of all of the tax season deadlines. To accomplish this, all that is required is the addition of a reminder or an email notification prior to July 1. This date is noteworthy because it marks the beginning of the period during which you can send in your tax return to the Australian Taxation Office for the financial year that ended the previous year (ATO). Those departing Australia prior to the end of the income year are also granted permission by the ATO to submit their tax return early prior to the end of the income year.

You can also visit the website of the ATO to verify the deadlines for submitting your documents. Because these dates shift from year to year, you need to make sure you're always up to date so you don't miss anything important. When you have spent the entire year getting your taxes ready ahead of time, you do not want to have to go through the trouble of providing an explanation for why your tax return was late.

Keep Important Documents Close by

When you start getting ready early for tax season, there are a few things that you need to get ready so that you won't have to scramble to find them or put off doing your taxes because you're missing some crucial parts. You will be astounded by the amount of people who are missing an essential piece of information that is required to complete their tax return. As a result, ensure that you have the following things on hand for easy preparation:

• Identification information
• Medicare identification number
• Australian financial institution account details
• Details about the spouse, including financial information
• Information about private health insurance

Knowing Which Claims to Make in Order to Get Ready in Advance

If you plan to start preparing for tax season early, one of the first things you will need to do is determine which of the work-related costs you incurred throughout the taxable year can be deducted from your income tax return. These costs can include the following things for students and recent graduates who have jobs:

• Phone bills for work-related calls
• Uniforms
• Professional development classes
• Paid memberships for professionals
• Donations of various kinds to charitable organisations

It is not a wise move to make the assumption that you are aware of all that can be deducted on your tax return. Due to the fact that regulations are subject to modification on an annual basis, it is important for you to review the material that is available on the ATO website twice and consult with an accountant or tax preparer to ensure that you have not overlooked anything.

There Is No Need to Worry About Managing a Disorganised Stack of Receipts

When you have a large number of receipts stuffed into a shoebox or folder, it may be a major hassle to wade through an entire year's worth of spending if your collection of documents is not well organised. This can be especially true if you have a lot of receipts. To avoid having to deal with this issue, you need to make sure that all of your payslips and receipts are promptly organised and stored in the same location. Maintaining consistency throughout the year can help you avoid losing anything, which will make it much simpler to locate everything you need once July rolls around.

You may get rid of all of your anxieties and, more significantly, you can save yourself a significant amount of time by filing your documents as soon as you receive them rather than waiting to do so. When it comes to storing your documents, you have a wide variety of options to pick from. When compared to using a physical filing system, which may be tedious and time-consuming, using a digital folder can be a huge aid. There are a variety of methods available to accomplish this, such as installing an application on your mobile device, compiling papers on a USB drive, or saving them on the cloud in order to make them accessible to an accountant when it is time to file taxes.

Obtain the Ideal Support

If you ever run into a problem with your taxes or become confused about how to file your return, you need to know where to go to receive the most sound recommendations from qualified tax experts. Do not just speak to any account; rather, select one that has specific experience working as a tax preparer and speak to them instead. If you take this step, it will help you become more knowledgeable in the future, and you will be able to quickly navigate the tax system.

When it comes to tax agents who are registered with the government, they are also able to complete your tax return for you. This individual will provide you with a considerable edge if you begin your tax preparations in a timely manner. You should also keep in mind that the fees paid to your accountant can be tax-deductible. If this is the case, you will be able to obtain some or all of that money back when you file your tax return for the following year.