PAPERWORK - BE ORGANISED
Preparing for tax time might seem like a once a year thing but why is it we usually put it off until the last moment, with a mad scramble to gather all the paperwork – possibly the night before your tax agent appointment or the due date for lodgement if self-lodging?
And watch out, everyone batten down the hatches, here comes Cyclone Tax Time (or is that Tornado Tax Time?) with anyone or anything in its path being bull-dozed!
But as we know, we can’t be surprised – tax time comes around once a year, every year. So what if preparing for it is something that could be an on-going, every day activity? An activity of keeping and storing all the necessary records and documentation, including copying any receipts or document that could fade, in a folder – real or virtual – as soon as possible after the transaction has occurred so it is ready to go when needed?
For example, you could designate a folder or tray at home or your business in which receipts or dockets are placed for the relevant tax year. You could even summarise these in a spreadsheet or document at the end of year for the tax agent or accountant.
Depending on your tax affairs and the quantity of transactions, a spreadsheet or accounting program might be a good idea too, so you can record and keep track of these transactions on a regular basis.
In other words, consider setting aside time each week to make it easier at tax time, so you are ready to go rather than it being a mad frenzy leaving casualties in its wake.
There is also the potential of cost savings on tax return preparation costs and the immeasurable health benefits of no stress or panic – and knowing where your finances are at any given time.
And guess what, you might even enjoy preparing your future returns when rush and pressure are not part of the picture.
What's more you’ll be up-to-date with where you’re at with your taxes and finances, which means little or no surprises once the tax assessment is finalised as well be more informed and prepared for expected or unexpected changes to your finances such as moving house, buying a new car or the fridge break down.
Ultimately this means less or no stress, pressure, struggle or stain on you and your health and those of others that would otherwise be a casualty in the wake of the tax time tornado or cyclone.