Tips for Preparing for End of Year Tax Time

By Derek Allan

It’s a time of year that many people dread but the worst thing you can do is ignore it and hope it goes away.

The best way to deal with tax returns is to be prepared and this usually involves some forward thinking and taking early action.

To make things easier at tax time here are some tips to follow:

  1. Use technology to help you keep records. Scan and store electronically any receipts for expenses and other paperwork so you have it on hand. There are plenty of apps like Dropbox or Google Drive that you can use to upload and store photos of your receipts – many accounting programs will also link right into these.
  2. If you’re not always near a computer try keeping records on your smart phone.  Just make sure you keep careful records of all transactions, incoming and outgoing, as it happens, rather than leaving it for months and risk forgetting all about it.
  3. If you run a business, make sure you have the right accounting software and that you are using it appropriately.  New Cloud based accounting software is great for this.
  4. Download electronic bank statements as PDFs or import them straight into your accounting system.
  5. Save time; use the online banking feature to get a copy of your bank interest, rather than working it out month by month from bank statements.
  6. Keep all your tax information in a safe place so that you know exactly where it is when the time comes.
  7. If your tax situation is more complicated than a simple Payment Summary from your employer, it may be worthwhile getting in touch with an accountant or tax agent.  It is their job to keep up to date with current legislation which will help maximise your return.  Their fees are also tax deductible.
  8. Talk to your accountant and get them to explain anything you don’t understand. It’s their job to explain what they are doing and why, and it will help you to understand more about the many ins and outs of tax rules and the implications for you personally or for your business.

I know it can seem like a lot of work, but it’s something that we have to do.  If you keep on top of it throughout the year it will be worth it come tax time.