As we once again come into tax season, there is a lot of stress and uncertainty about how things will play out. Given the new work arrangements many of us have been operating with these past few years, tax confusion is at an all-time high. The good news is that regardless of your circumstances, if you follow the five tips below, you’ll enjoy a far easier tax season.
Calculate the Check
The best way to ensure that tax time goes smoothly is to know exactly what you’re going to owe so there are no surprises along the way. You can work this out by Googling “income tax calculator Australia” and selecting one of the top results.
Simply plug in your income as well as whatever pay-as-you-go withholdings your employer has taken out, then estimate what your deductions will be. The calculator will do the rest for you. This is a great way to get a rough idea of how things will play out.
Have the Right Professionals in Your Corner
You’ll also want to ensure that you have the right professionals in your corner. This means finding an accredited tax accountant and having them prepare your return. It may not seem like a big deal, but you can claim back the cost next year anyway, and they can get you a far better deal.
If you have a self-managed super fund, keep in mind that you need to lodge a separate return for your fund. To make this easy, find a local SMSF accountant who can help you ensure that you’re meeting your obligations.
Know What You Can Claim
Did you know that if you manage your own small business, you can claim pretty much everything you spend in order to get it off the ground and keep it running? For example, if you hire a creative design studio, that’s a tax deduction. Likewise, the bill for your work phone is considered a business expense, as is the budget that you put towards any advertising.
Individuals can also claim a lot of things you may not have even realised. For example, you can claim a portion of your phone bill if you use it for work, a washing allowance for any uniforms you have to wear, and almost any expense you’ve incurred by working from home, including a portion of your electricity and internet.
Give Back to the Community
All charitable donations over $2 are tax-deductible in Australia, so be sure to keep track of any funds that go to a worthy cause. This applies to both individuals and businesses. Businesses that practice social procurement may also be eligible for tax breaks, so be sure to discuss this with your accountant.
Keep a Separate Account
Finally, if you do any form of work that isn’t taxed before the money hits your account, you’re going to need to put funds aside to pay the ATO at tax time. This generally means any form of self-employment, but if you’re a contractor, this may apply to you too.
You can work out what you’ll owe by visiting the tax calculator we mentioned at the top of this article. Ideally, you’ll have been putting money aside each pay cycle to cover the bill. As a side note, we suggest keeping these funds in a separate account so you’re not tempted to spend them throughout the year.
Follow these five tips, remember to keep all your receipts, visit a professional to get your tax done, and this could be your easiest tax session yet!
