Ahh, tax. There’s no avoiding it. And around these parts it’s
that time of year.
In Australia, our financial year runs from the beginning of
July until the end of June which always seems very neat. We then have until the
end of October to get all the paper work done and submitted to some nice
accountant who knows what they are doing. Only once did I try to do my own tax
return and I spent the whole time crying. Never again.
So I spent last week putting it all together and was pleased
to see that a few new initiatives I had implemented this past financial year
worked really well for keeping on top of all the paperwork. Plus the old
reliables are still doing their job, which is always good to know. So here’s a
few tips for anyone who shudders at the idea of doing their tax return!
1.
The big success for me this year was making
myself spend just 10-15 minutes every Monday on bookkeeping. I chose Mondays
because there were usually invoices to write following the weekend gigs so I was in
a financial state of mind anyway. But just that short time spent adding income
and expenditure to my accounting software has paid off big time as there is no
scrounging around for paperwork or trying to remember how that mystery $100
came to be in my bank account.
2.
Have a separate bank account solely for business
transactions. Nothing makes tax life easier than transparency of transactions
(account for everything) and no confusion between business and personal
transactions. A separate account for receiving all your income makes this LOADS
easier.
3.
Have some kind of accounting system, anything
from MYOB with all the bells and whistles to a humble notebook and pen. The
important thing is that it works for you and YOU USE IT!
4.
A plastic loose leaf folder. This is a little
strange but we own 4 filing cabinets. And I hardly use any of them. But I love
filing things in plastic loose leaf folders. I always remember being told that
any person can play an instrument if they can just get to the right instrument
and I think the same is true with organisation. Find what works for you and you
are more likely to use it.
5.
Keep an envelope in the car for all your parking
tickets. I mark mine with the details of whatever financial year it is and then
bring it inside while doing my tax return, and, hey presto, there are all my
receipts for parking. And if I park at a meter which doesn’t issue a ticket I
write the date, location and amount on the back of the envelope. This year my
parking costs were in the vicinity of $350, which I can claim back as a
necessary expenditure. That’s a lot of money that could have been lost with
parking tickets just floating around the car and then getting chucked out.
What tax tips work for you?
Thank you for this. I messed up my taxes a few years ago, and I had to seek out IRS tax help. I have been trying to organize myself and learn to do my taxes on my own. I think I may get this year's returns done professionally, but I am going to try and do next year's on my own. This is a great start, so I thank you for the advice.
ReplyDeleteGood on you Joan for tackling those two biggies- organisation and taxes! Would love to hear how you go with all of it, and any tips and tricks you might have as well. All the best! Megan
ReplyDeleteI agree with tip#3. Accounting information systems are handy when it comes to dealing with taxation. Actually, it is a smart idea to use it, especially for people who have trouble handling their finances. The biggest advantage of using an accounting system is that it can prevent common human errors committed during the process. Here’s another tip: prepare your paperwork in advance. That way, you can avoid being late and getting penalties.
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