Tips To Take The Stress Out Of Tax Time
Do you hate filling your taxes every year? Are you overcome with dread at the prospect of having to compile all of your papers and perform all of the necessary calculations? After that, unwind! There are a lot of different things people may do to make tax season less stressful. In the following blog post, we will discuss some helpful hints that will make the procedure run as efficiently as possible.
The time of year when taxes need to be filed can be stressful, but it doesn’t have to be. With these helpful hints, you’ll be able to get through tax season without feeling overwhelmed or stressed out. The importance of making preparations in advance cannot be overstated, thus it is imperative that you start gathering your information and documentation as soon as possible. Also, don’t forget to make use of all the resources that are available to you, such as the internet calculators and the assistance that is provided by your accountant or tax preparer.
Tax time is widely regarded as the period of the year that individuals dread the most. It’s easy to be overwhelmed by the stress of having to assemble all of your documentation, figure out how much you owe, and file your taxes. But that doesn’t mean that it has to be! If you follow these pointers, you can reduce the amount of stress you feel throughout tax season. To begin, get a head start on collecting your necessary paperwork so that you won’t have to scramble at the eleventh hour. Use a tax calculator to get an approximation of how much you owe so that there are no unpleasant surprises. And finally, if you want to save time and avoid headaches, you should file your documents electronically. With these helpful hints, filing your taxes won’t be nearly as stressful!
Advice on How to Reduce the Stress Associated with Tax Season
The absence of receipts, the presence of debt, and the inability to make sense of the numbers can all contribute to a feeling of being overwhelmed.
This predicament may be extremely prevalent, but it is also entirely avoided. May and the beginning of June are the ideal months of the year to begin getting organized, to reflect on the year that has passed, and to make preparations for a next year that will be both more organized and more profitable.
Here is some guidance from us on how to get ready for the end of the fiscal year, maximize your deductions, and keep the whole process as stress-free as is humanly feasible.
Pay Your Superannuation
As a result of the increase in the minimum amount of superannuation that employers were required to pay their employees in the previous year, companies now have the responsibility of ensuring that they pay their workers the appropriate amount of superannuation on time. Unless it has been paid in full and on time, superannuation contributions are not tax-deductible. Therefore, lowering your overall tax liability can be accomplished by ensuring that all of your payments are current.
Make Advance Payments on Your Tax-Deductible Expenses
Prepaying for items that you usually purchase or stockpiling them in advance allows small and medium-sized businesses to take advantage of additional tax benefits in a straightforward manner. This could contain office supplies, supplies and equipment for the bathroom, and equipment for the office. Then, by moving forward this expense, you will be able to lower the amount of revenue subject to taxation for the current fiscal year.
Be aware of the tax breaks to which you are entitled.
Any company that generates less than $2 million in revenue is potentially eligible for a variety of tax breaks, including reduced rates of income tax, capital gains tax, goods and services tax, and fringe benefits tax. This is something that is especially significant for extremely small firms, so it is imperative that you find out what you are able to claim and then submit the appropriate paperwork to do so.
Be Aware of Your Depreciating Assets
Additionally, there is the possibility that small enterprises will be allowed to make a claim for the depreciation of assets that are worth up to $6,500. In most cases, this entails the acquisition of office-related items such as computers, printers, and furniture. Be sure to keep careful records of all of your assets, including the dates and prices at which they were acquired, so that you can maximize any prospective tax deductions.
Write Off Bad Debt
The typical amount of time that passes between the issuance of an invoice and the receipt of payment in business-to-business transactions is 56 days. If you are still chasing bad debts from the previous fiscal year, now is the moment to write them off as non-collectable obligations. Your bad debts are a tax deduction and can be applied to reduce the amount of income that is subject to taxation.
Examine the state of your financial resources
When it comes to the operation of a successful business, having a solid cash position is essential. If you are aware that your cash position has to be reevaluated, you might think about applying for a commission advance loan so that you can get off to a good start with the new fiscal year. Even if you don’t use the money on anything in particular for your company, just knowing that you’re in a strong position will provide you with a sense of calm and assurance.
Examine Your Present Methods of Accounting
The close of the fiscal year is the ideal opportunity to perform a thorough spring cleaning of the accounting system. Be certain that your software is capable of performing all of the tasks you require of it, and ensure that all of your tax and superannuation percentages are brought up to date to reflect any changes brought about by the new fiscal year.
The secret to making the process of closing up the financial year stress-free and profitable as a whole is to start getting organized for it as soon as possible. This time of year is traditionally dedicated by businesses to focusing on their financial records, and if you are successful in this endeavour, you will be well-positioned to enjoy a profitable year ahead.
Call The Experts On Day Dot
You might believe that your tiny side venture doesn’t require any assistance on your part. But what if it becomes popular overnight, and you haven’t taken the time to organize your finances? Utilizing the services of an accountant or other tax professional should be the initial step, if at all possible. Even before you have made any money, as soon as you obtain your ABN, go and see someone. This should be done immediately. They will keep you on the straight and narrow and help you consider things that you might not have otherwise given any thought to consider. Things that, if done consistently over the course of an entire tax year, might wind up saving you money.
Take Pictures of Your Receipts
Simply take a picture of the receipt within something like the Evernote program, and then you will be able to easily maintain tabs on all of the money you have spent on business. In the event that you do not have Evernote, you can simply use your phone to take a picture of the document, and then place each image in its own folder. You can keep the digital copies in a shoebox as well if you wish; however, most phones (and apps like Evernote) now connect to the cloud, which means that even if you lose your phone, you will still have access to your receipts. Easy.
Maintain a separate credit card for all of your company’s expenditures
If you are operating your business as a sole proprietor, you do not need to go through the entire process of setting up a business account. Instead, you can just ask your bank to add an additional account to your existing portfolio, and you can even attach a card to this new account. You will still have a record of all of your company spending through your bank, and you will know exactly how many tax-deductible transactions you have made. This is the case even if you lose your shoebox, your phone, and the cloud.
Make Use Of A Bookkeeping Service That Is Adaptable To Your Needs
When it comes to keeping track of everything you’re doing, having access to online services and tools like Xero, Freshbooks, MYOB, and Quickbooks may be an absolute godsend. You can also link the majority of them up to your bank accounts, which means that you can just log in and see all of your transactions, both incoming and outgoing, in one location. Even your accountant will be able to log in and keep track of your activity, which, despite what it may seem like, can be viewed as a positive development.
We couldn’t suggest those applications more highly; having said that, you could find it simpler to use Microsoft Excel or Google Sheets and manually enter everything, or you might find it more convenient to keep track of everything in a notepad. Everyone operates in a slightly unique manner, so you need to discover a solution that works for you.
Sometimes, in order to make money, you have to spend money first
It can appear counter-intuitive, but a lot of individuals believe that if they do their own taxes, they will end up saving money by doing so. In point of fact, it is believed that the reverse is true. Because these individuals and services are so knowledgeable about what they are doing, it is possible that you will end up saving money by making an initial investment in expert assistance and by paying for an online accounting service at various points throughout the process. Investing in these services may also give you more time and mental space to devote to the aspects of your company’s development that are most important.
Maintain All of Your Important Documentation Relating to Taxes
Self-assessment is how taxes are handled in Australia; nevertheless, the Australian Taxation Office (ATO) may demand you to submit documentation that will help validate the information that you supplied on your tax return. In the event that they request it and you are unable to supply it, the ATO may refuse to approve your claims, change your assessments resulting to higher taxes, charge you with interest or penalties, or any combination of these options.
Because of this, it is imperative that you maintain all of the essential documents linked to taxes, including receipts, contracts, and invoices. Keep these nearby so that you can quickly retrieve them and hand them over to the ATO if they make a request for them. You are required to maintain these documents for a period of five years in the majority of situations.
Be aware of the dates for both the submission and the payment. Take careful note of the dates on which you are required to file your taxes and make payments, even though doing so might seem like stating the obvious.
In addition to preventing you from forgetting these dates and skipping payments, which could result in penalties, it could also make it possible for you to pay your taxes early and receive a credit for interest on the early payments, as the ATO does so for payments made early.
Please be aware that the deadlines for the payment and the submission of the application may differ from one another, possibly depending on the kind of person or organization that is making the payment. Therefore, there will be a variety of various due dates for partnerships, superannuation funds, and individuals. It is recommended that you check the ATO’s website or phone them to confirm the dates, and you can do either of these things at your convenience.
Pick a method of payment that is convenient for you
When it comes to making payments for taxes, the ATO gives taxpayers a number of different alternatives. You can make the payment without having to leave your house and at a time that is most suitable for you if you do your banking via the telephone or the internet, which is one of the most convenient ways to do this. If you are unable to make the payment via the telephone or the internet banking system of your bank, you also have the option of going to the branch of your bank.
One more choice is to pay with a credit card through the EasyPay service provided by the government. Going to their website is all that is required of you in order to complete the payment process. You will be able to pay your taxes whenever it is most convenient for you, much like when you bank over the phone or online.
Then there’s the tried-and-true method of sending a check or money order to the ATO in the mail. You can do this if you like. However, in order to avoid making payments that are late because of delays caused by the mail, the ATO suggests that you transmit payments made through the mail early.
If you are located outside of the country and need to make a payment, you can use any of the methods described above. You also have the option of submitting a payment to the ATO in the form of a wire transfer from the bank you use overseas. In order to prevent making late payments, it is essential that you take into account the time difference that exists between where you are right now and Australia.
You also have the option of making a payment in person. However, in order to complete this step, you will need to visit Australia Post rather than an ATO website or retail location. Keep in mind the following information when making a payment at the post office: payments can be made in the form of a check, cash (up to $3,000), or EFTPOS; also, you are required to show your payment slip together with your payment.
Make a record of all of the money you earned and the deductions you are eligible to receive
It is essential that you have a good understanding of the amount of money you brought in during the tax year in question. This includes income that you’ve made from employment, pensions, investments, capital gains, and any other types of income that you may have.
Additionally, the ATO publishes a list of eligible deductions that can be claimed. When your total income is adjusted downward by these deductions, the remaining number is the amount of money that is subject to taxation. If you are an investor in real estate, for instance, you may be able to reduce your overall taxable income by claiming deductions for your advertising and marketing expenses or by employing the strategy of negative gearing.
In general, making preparations in advance can help lessen or even eliminate the stress that is associated with having to pay taxes. If you have all of your records, have kept track of all of your revenue, and have selected the most convenient method to pay your tax, then the procedure will be much easier for you to complete. In addition to that, doing so will prevent you from being fined and from having to pay interest on payments that were made late.
Ensure That You Are Providing Information That Is Accurate
You are only allowed to claim the money that you actually spent. Therefore, do not overstate deductions in an effort to gain a larger return, and only claim costs that you can show you spent by presenting an invoice, receipt, or bank statement as evidence.
Also, make sure that you appropriately record all of your revenues, including gains from investment property, any income from overseas sources, and earnings coming from trading cryptocurrencies. Be cautious with your information because the ATO has access to a wide variety of data sources that it can use to validate the data that you’ve provided them.
You can seek clarification from any organization, including financial organizations, banks, and even government bodies, regarding your claims. In the event that your tax return contains inconsistencies, the ATO may challenge it.
Do Not Rely On Data That Has Already Been Pre-Filled By The ATO
You can have the ATO’s systems pre-fill a significant portion of the information regarding your income. However, you shouldn’t make the assumption that these revenue statistics are accurate or comprehensive. Early filers who utilize the ATO’s myTax system may frequently find that loads of data are missing from their pre-fill because many third parties, such as banks, don’t provide information about you to the ATO until late July or early August.
Even if the information was pulled directly from the ATO’s databases, you are still legally responsible for any revenue that you fail to report and are subsequently questioned by the ATO about it.
The vast majority of tax accountants will not rely on pre-filled data but instead will work from the documents you provide as the sources. Those individuals who prefer to file their taxes early will have a reduced risk of their income data being lost as a result of this.
Because the majority of us are attempting to cram more and more into our 9 to 5 hours, we require services that are flexible enough to work around our schedules. During tax season, life can get even more hectic than usual. Because of this, we work outside of normal business hours to ensure that you are able to submit your taxes in a timely manner either online or in-person at one of our 470 locations.
Utilize our Online Tax Adviser to have access to a professional wherever you are and file your return as soon as possible. After carefully going over all of your pertinent facts and tax documents, simply submit them, and an Online Tax Adviser will get to work getting your return ready in order to obtain you the largest possible refund. In the course of their work, our advisor will get in touch with you through a platform that guarantees your privacy and safety online so that you can remain informed regarding the status of your refund. Or, if you feel more at ease taking the wheel, you can use our self-service Online Tax Express Return and file your return whenever and wherever you like.
Get Expert Help
If you make mistakes on your tax return, you will have to deal with the consequences, which could include a smaller refund or penalties from the ATO. It is much less stressful for the vast majority of people (74 percent of all Australians!), to let an agent handle the process of completing their return. This assures that the return will be precise and comprehensive, and a skilled agent will typically be able to identify hidden tax deductions that you were unaware you were eligible to claim.