Journeyer’s Chronicles

Today is the last day of the financial year in Australia. That means it’s time to start thinking about taxes. Ugh. Do you have all your paperwork ready to go for this year? Is it a simple matter of grabbing a file and handing it to your accountant or plugging in some numbers yourself? No?

What you can do if you haven’t prepared for this year’s tax return

It’s not too late to do a little bit of organisation for your 2007/2008 tax return. The first thing is not to panic. You have plenty of time to get things together in some sort of order. Try not to wait until the last minute though. Bear in mind, the sooner you get your return to the tax office, the sooner you get your hands on any refund that’s coming your way. And the more organised you are, the more deductions you may be able to claim.

• Get a folder. Size depends on how much paperwork you anticipate having. If you don’t have many deductions a manilla folder will probably do. Label it 2007/2008 tax information.
• The easiest information to lay your hands on will probably be your PAYG summary. Start by putting that in your folder.
• Scout around the house and at work for any tax receipts you might have stashed. Remember, to make a claim for a deduction, you need to have the paperwork to back it up. Put them in your folder.
• If you’ve kept copies of your bank statements pop them in your folder. If you haven’t kept them, you can likely download them from your bank’s online banking site.
• Gather any paperwork for investments and other income and put that in your folder as well.
• If you have the time or inclination to be particularly organised you could group all your paperwork into like sections to make it easier to sort through.

By putting paperwork in a dedicated folder as you find it, there’s no need spend hours trying to find everything at once. You’ll know exactly where to go when you’re ready to file your return.

Use a tax agent or prepare your return yourself?

Next decide if you’re going to use an accountant or tax agent to prepare your return, or do it yourself.

Tax agents

If your financial situation is complex or you are uncomfortable working through the numbers, the best route to take is using a tax agent or accountant. You can hand over your folder that you prepared and they will work through it and lodge your return on your behalf. The only downside is they charge for the service (of course).

Prepare your own return

We have a fairly simple financial situation so I do ours myself using eTax (for Australian residents). eTax can be downloaded from the ATO website for free.

eTax has a comprehensive help section if you’re a little concerned about all the ins and outs. It uses a question and answer system to guide you through preparing your return and gives an unofficial estimate of any refund (or payment) once completed. To use eTax you’ll need a copy of last years tax return to verify your identity.

I submit our returns online and usually get our refund within a week.

A note on preparing your own returns: Ensure that any deductions you claim are legitimate and that you have the supporting paperwork. It’s a good idea to check eTax’s help section at each question, just to make sure the rules haven’t changed from last year.

What do I need to keep and for how long?

Preparing a folder with all of your tax paperwork makes it easy to store once you have submitted your return. Everything is together and easy to lay your hands on should the tax office ever have a query. This section of the ATO website has a comprehensive list of what you should keep and for how long.

Preparing for 2008/2009

Being organised at tax time makes it so much less of a chore. If you collect all your paperwork in one place during the year, it can be a matter of an hour to have your return completed and submitted. Starting on the right foot now, can make tax time 2008/2009 so much less, dare I say, taxing (yes, I can hear you all groaning).

• Get yourself an A-Z expanding file. This might seem excessive, but everything money related is going in here. It’s easier to cull the paperwork at the end of the year than to find it. Label the file 2008/2009 tax information.
• As receipts, dividend statements, bank statements, Centrelink forms and so on come in during the year put them into your tax information file.
• Remember that if you do even a little bit of work from home, you may be able to claim things like electricity, phone and internet access so keep your bills as well.
• Before you file your receipts jot a note on them regarding what they were for. Some of the thermal inks tend to fade over time making it hard to read them come tax time.

This is a fairly simple, quick way of staying on top of things at tax time. It has worked for our family for a number of years. As I mentioned above, we have a reasonably straight forward financial situation. If your situation is more complex you might consider using a software package that can track tax items for you.

If you have any queries, don’t be put off visiting the ATO’s website. It is quite user friendly and is packed with information.