How to be Organized for the 2019/20 Financial Year
Happy New Financial Year! I know, I know. It’s two months late, but I’ve only just submitted my tax return and I’m getting my organization systems ready for the coming financial year.
Similar to January 1st being a fresh slate for me as a whole, July 1st means a fresh slate for my finances and gives me the chance to make sure my money is working as hard as possible between now and the end of the year.
Around this time, I am also reminded of how annoying it is to have to collect all the necessary information for my tax return. Even though we have an accountant, it is still up to me to collate the figures and work out the percentages for me and my husband, our investment property, and our shares portfolio.
To help with this, I’ve put together a list of hacks I use to make tax time run as smoothly as possible, whether you are tracking down nothing more than your payment summary, or a whole portfolio of figures.
An Email Folder is Your Friend
I receive almost all my bills via email, which is both super convenient and more environmentally friendly than using all that paper. I also have a couple of different digital folders to store emails I may need to find again – one of these folders is labeled Tax Time. By dragging any email relating to a bill payment for our investment property into this folder, it’s safely stored away for July 1 when I go hunting for it!
I’m not too picky either! As I receive a fair few emails over the year, if I think something may be tax-related I’ll store it in my Tax Time folder. This means I have a smaller amount of information to go through at the end of the financial year.
Once I’ve finished my tax return, and have stored copies of my bills on my hard drive (more on that a bit later), I move all the emails in my Tax Time folder to a more general House and Bills folder, leaving good old Tax Time empty for a new financial year.
Wait Until August
The more bits and pieces you have to collect for tax time, the longer it seems to take. Although I get revved up as the calendar folds over to July, there’s no point in worrying about submitting my documents to my accountant until mid-August.
While it is possible to calculate every amount needed for your return manually, most companies, unions, and organizations will send you statements detailing your contributions over the past 12 months specifically for use in your tax return.
Taking your time also means you’re less likely to miss something you can claim. Having an accountant to request the obvious bits and pieces is excellent, but only you truly know the individual bits and pieces you use that can be claimed.
Keep Logical Electronic and Physical Storage
For the last three years, I have kept each year tax documents stored electronically on my hard drive. Every little thing related to my tax return: how I calculated expenses, proof of interest statements and bills, etc. I used to keep paper copies of all these documents, but since minimizing the clutter in my house a hard drive and scanner have become my best friends.
Not only does this make it easier to look back on your tax documents should you be questioned by the ATO, but you are also actually required to hang on to your tax records for FIVE YEARS from the date you lodge your tax return in case you are audited.
Ain’t nobody got the space to hang on to those physical documents for five years! I’d be concerned about my daughter getting into them and using them as art pieces. Nope, it’s the hard drive life for me
Read All The Things
How many times have you wondered, “Can I claim this back on tax?”. It’s super simple to browse through the ATO website (or your local tax office site), which is chock-full of knowledge and examples to help you claim back everything you’re entitled to.
The ATO publishes occupation-specific info sheets (for nurses, office works, police officers, etc.), and breaks down each category of your tax return so you can find the answers to your questions easily. They are also constantly updating their knowledge-base as new ways of earning taxable income become more prevalent, e.g. ride-sharing and AirBnB.
Whether you are a business or an individual, your local tax office website is well worth a browse if you’re unsure about anything tax-related throughout the year. It can also save you money if you choose to DIY your tax return instead of hiring an accountant.
Knowledge is power when it comes to money, so do yourself a favor and take a squiz.
Start a Business Spreadsheet
For the mompreneurs and small business women out there! There is so much advice that tells us to keep our business expenses and personal expenses completely separate, even going so far as to pay yourself a wage from your business revenue. I couldn’t agree more, however tracking your business incomings/outgoings is no easy feat, as they tend to work a little differently from your personal budget.
I’ve been giving some different apps a try for my business expenses, but between the cost and learning a new system, and the limitations some put on you, Microsoft Excel has always been a fail-safe method of tracking everything exactly how I want it.
It’s also possible to break down your business budgeting to monthly or weekly depending on how you like to organize your financial year. And of course, the best feature is that it’s FREE!
You may also be required to pay taxes on a different schedule as a small business owner, which is why it is even more important that you are on top of your finances. If Microsoft Excel isn’t your thing or you’re looking for something specifically for tracking expenses on the go, you could try QuickBooks Self-Employed (not sponsored, just rather like the app!).
It has an amazing range of features for organizing business expenses and even tracking mileage if your work requires you to travel. It does have a monthly subscription fee, but the convenience factor of this app is right up there.
This time of year can be difficult for many of us, between the confusion of claiming deductions and organizing offsets (though there is a small bonus for many Australians this financial year), and the stress of realizing we are already over halfway through 2019!!
Setting some small changes in place now can make your future tax claims much simpler, no matter what the next 12 months throw at you! Now go and responsibly enjoy those tax returns!