With 30 June just around the corner, now is the perfect time to start sorting through your finances to make sure you are ready for tax time.
We’ve pulled together our top five tax time preparation tips to help get you started.
1. Talk to an expert
Everyone’s financial situation is different, so making time to talk to a financial adviser or tax specialist will help you understand what you can and can’t claim come tax time. There may also be things you can do now to reduce your taxable income before 30 June.
And remember, fees for ongoing financial and tax advice may be tax deductible.
2. Get prepared
Having all the information that you will need to complete your tax return ready and in one place will make your tax time preparation much easier. To find out what you will need, view our tax return checklist.
Rather than leaving it to the last minute to organise your dividend and bank statements, receipts and expenses, take the time to get your documents in order ahead of time. Better yet, implement a system that manages this task throughout the year, such as a taking photos of receipts and storing these on your phone or using the ATO app. If you get in the habit of keeping your records organised during the year, completing your return will be a breeze.
If you have been working from home during COVID-19, make sure you visit the ATO’s website to find out whether you are eligible to claim home office expenses. There are several calculation methods you can use, so it’s good to be prepared.
3. Consider pre-paying expenses
Certain expenses such as the interest expenses on an investment loan, or your income protection policy premium can be brought forward by 12 months and prepaid in the current financial year. Pre-paying eligible expenses will enable you to claim the deductible expense against this year’s accessible income.
4.It’s a great time to give
When you donate to a charity or Deductible Gift Recipient, your generosity will not only provide financial assistance to others, it could also entitle you to a tax deduction. If you have been thinking about giving to charity, doing this before 30 June will mean you can claim this in your upcoming tax return.
5. Top up your super
Depending on your situation, you may find it’s worthwhile to top up your super. Visit the ATO website to check if you’re eligible to claim a deduction for personal super contributions.
Preparing for the end of the financial year now can save you time and money down the track. The trick is not to leave it to the last minute!
For more tips and hints on how to manage your taxes, check out our tax return checklist.
This information is sourced from the Financial Knowledge Centre and is provided as a guide only. P&N Bank does not provide financial advice and you should consult your accountant of financial adviser.
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