Tax time can be stressful at the best of times. Add in the complications of being a sole trader, having investments or owning a rental property, and it can be one of those jobs that just keeps being put off. But instead of letting it hang over you, follow these tips to a stress-free tax return:
Know what paperwork you need
Instead of sifting through a pile of documents wondering if you’ll need to provide information from any of them, knowing which documents you’ll need to provide can seriously reduce the paperwork. The ATO’s dedicated page, Records You Need to Keep, allows you to check off which documents you’ll need. These include income statements, statements from financial institutions showing the interest you’ve earned, dividend statements, summaries from managed investment funds, receipts for asset purchases, contracts, tenant and rental records.
Track your electronic records
Trawling through a year’s worth of emails to find what you need at tax time is time- consuming to say the least. The ATO’s MyDeductions app allows you to track work-related expenses, interest or dividend deductions, plus other expenses as you go. Then, when you get to tax time, it’s all in one place ready to give straight to your tax agent. If you’re a landlord who has a holiday home, it’s worth making a record of when the holiday home was rented and when it was used for personal holidays to avoid any confusion and ensure you’re able to claim the maximum amount.
Buy yourself some time
If you’re preparing your own tax, it will need to be lodged by 31 October 2020, but if a tax professional is lodging for you, you can extend the date until 15 May 2021 – and potentially even longer, depending on your circumstances. This also means you can defer any payment you owe too, with returns lodged by accountants often not due until June 2021. Remember that expenses such as insurance and interest can be paid early, so they can be claimed ahead of time.
Check your knowledge is up to date
If your tax situation isn’t straightforward, talk to a tax professional who will help you ensure you’re up to date with the latest rules. COVID has meant there are many new tax rules and benefits you could be eligible for, so checking in with someone who has all the recent knowledge at their fingertips could reduce your stress – and save you a lot of money. The EY TaxChat app gives personalised advice from an experienced tax professional. After you answer a series of easy to understand questions, you’ll be matched to a professional most suited to your tax situation, whether you’re a sole trader, investor or landlord. You can ask your consultant for advice, and they’ll complete your tax return after you share pictures of your documents. Do it in your own time, at a pace that suits you. Seriously stress-free.
Learn more about EY TaxChat