One of the most important parts of successful financial planning is making sure your taxes are in order. According to the Australian Taxation Authority (ATO), nearly half a million people filed their first ever return in 2015, which means there are many Australians that might have a bit to learn.
Whether you're calculating your first home loan or already manage an extensive asset portfolio, here are five things you should always remember as you lodge your paperwork.
1) Check that it's necessary
While most people will file a tax return this financial year, you might not actually have to. If you earned income or received benefits, or generated any kind of money that was taxed, then it's likely that you will need to go through the process.
But if you feel like you perhaps might be omitted from lodging a return, the ATO has a tool that helps you work it out.
2) Find out what you can claim from work
If you have a lot of costs that pertain to your work, you might be able to claim some of these back as tax deductions!
According to the Australian Securities and Investments Commission's MoneySmart website, they have to at least be in the three following categories:
- Money you spent yourself for work that was not paid back by the employer,
- Spending that was relevant to your work,
- Catalogued and backed up with evidence.
While not every cost associated with your job will be deductible, there might be some that are. The ATO is another good resource for finding out more about this.
3) Remember your deadlines
Don't feel rushed about getting your paperwork together!
While the end of the financial year is coming up fast, you actually have until the 31st of October to lodge the tax return. So don't feel rushed about getting your paperwork together! Take your time, make sure everything is in order, and then lodge it before Halloween.
The MoneySmart site points out that you can actually lodge after this date if you are using a tax agent, but you have to have organised the process with the agent before the 31st.
4) Check up on your rental property
If you have taken out a home loan to invest in real estate, there are a lot of relevant deductions you can make. However, the ATO is paying close attention to investment properties this year, and it had a few choice pieces of advice for people in this position:
- Make sure the property was rented out or available for rent for the period over which you are making deductions,
- Back up your claims with records,
- Account for times the property was used for private purposes,
- Make sure claims on freshly bought homes are accurate.
Managing investment property is a great wealth management tactic - just make sure to do it right!
5) Take it online
One of the best things about the advent of the internet is the ability to do almost anything from anywhere, and tax has become a part of this. With the ATO's new MyTax system, people can file their return and assess their finances from the comfort of their own computer - or tablet, or even iPhone.
Tax time is never the most fun time.
You have to set up and link your account, but once that is done you can sort out your tax at a leisurely pace without the paper trail or phone calls you used to have to make.
Tax time is never the most fun time - there are certainly plenty of things we'd rather be doing! But unfortunately, it's just one of those things that has to be done. If you want a bit of help sorting out your money, don't hesitate to give your local Yellow Brick Road representative a call.