Five tips to get you tax time ready

The end of June and ‘tax time’ seems to come round faster each financial year. Whether you see it as a chore or “just one of those things”, it’s definitely the perfect time to sort through your finances. 

We’ve pulled together our top preparation tips to help get you ready for a smooth tax season.

1. Get prepared

Having all the information that you will need to complete your tax return ready and in one place will make your tax return submission much quicker and easier. Rather than leaving it to the last minute to organise your dividend and bank statements, receipts and expenses, take the time to get your documents in order ahead of time.

Key things you’ll need are:

• your bank accounts details
• your Tax File Number (TFN)
• your Medicare number
• your PAYG summary from your employer(s)
• your receipts for anything you want to claim as a deduction
• your statements showing any money you’ve received, including interest you’ve earned.

You may find that implementing a system that manages all this throughout the year makes your tax time process even simpler. Taking photos of receipts and storing these in a dedicated folder on your phone or using the ATO app to upload them could save you a lot of time. 

If you use our mymo app, you may find it helpful to categorise your spending – that way it’s not too much effort to find your charitable donations or work-related expenses. If you get in the habit of keeping your records organised throughout the year, completing your return will be a breeze when tax time rolls around.

Work from home at all? Make sure you visit the ATO website to find out the latest information on claiming working from home expenses. There are several calculation methods you can use, so it’s good to be prepared and understand the differences.

2. Consider pre-paying expenses

Certain expenses such as the interest expenses on an investment loan, or your income protection policy premium can be brought forward and prepaid in the current financial year. Pre-paying eligible expenses will enable you to claim the deductible expense against this year’s accessible income. Check the ATO website for up-to-date information.

3. It’s a great time to give

When you donate to a charity or Deductible Gift Recipient (DGR), your generosity will not only provide financial assistance to others, it could also entitle you to a tax deduction. Donations over $2 are tax-deductible and you can include them in your tax return. So, if you have been thinking about giving to charity, doing it before 30 June is a good time to do it.

4. Top up your super

Depending on your situation, you may find that it’s worthwhile making some extra contributions to your superannuation. By topping up your super you’ll not only have more money invested for your future, but it may help you reduce your tax bill too. 

Visit the ATO website to check if you’re eligible to claim a deduction for personal super contributions. Your super fund will likely have some helpful information on this topic too – so make sure you read that first.

5. Get your health covered

Do you have appropriate private patient hospital cover? If not, you may be liable for the Medicare Levy Surcharge (MLS) on top of the 2% Medicare Levy. The amount of surcharge you are required to pay will depend on your income and circumstances. You can avoid the surcharge by purchasing an appropriate level of hospital coverage - just make sure you choose an approved health insurer.

Preparing for the end of the financial year before it rolls round can save you time and money. The trick is not to leave it to the last minute.

If the thought of dealing with all this is too much, or you want to ensure you’re claiming as much as possible, then speak to a financial advisor or tax specialist. Everyone’s financial situation is different, and seeking help from a professional can help you understand what you can and can’t claim and make tax time easier. And remember, fees for ongoing financial and tax advice may also be tax deductible!