Can you believe we’re half way through 2012 already? You know what that means don’t you? Tax time!
I know … ho hum. Not many people get excited at this time of the year. It takes a lot of effort to get your tax documentation in order, the tax return done (either by yourself or your accountant) and then submitted. Of course the exciting time is when you get your tax return back and you see you’re getting a return. Then it’s time to celebrate!
With 72% of tax paying Australians using an agent to lodge their tax return it’s wise to plan ahead. So how can you work smarter so you’re ready for tax time?
The Association I am part of, the Australasian Association of Professional Organisers, recommends the following when putting your tax return together.
Know what you need
Keeping everything “just in case” creates unnecessary paper piles which can be very overwhelming. Talk to your accountant to find out what records and receipts you need to keep.
Keep it simple
Set up a simple system for your paperwork and keep everything in the same place.
Organise your receipts
Keep a separate section in your wallet or handbag for tax deductible receipts as you collect them. Make a note about what the expenses relate to on the back of the receipt.
Make time to get organised
Schedule time in your diary each week to keep on top of your tax and household paperwork. It’s much easier to file as you go than try and tackle it all at the last minute.
Once you have received your Notice of Assessment, attach it to your tax folder and archive the records in a safe place so that you can quickly retrieve your documents if you are audited. Talk to your accountant to find out how long you should keep your records.
Beating the backlog
If you have more than three years of returns to complete dedicate a lidded plastic box or an entire filing cabinet drawer to the job. Label a new foolscap envelope for each financial year you are missing a return (eg 1 July 2009 – 30 June 2010). Round up all your paperwork and place it in the envelope for the relevant year. Then hand the envelopes over to your accountant.
Chat to your accountant if you are unsure about what to keep, and seek the help of a Professional Organiser who can help you put simple systems in place to keep your paperwork in order.
So what’s the next step? To plan ahead. To know that each year you will need to do your tax return – so why not work towards making it easier for yourself?
What does this look like in my household? I have a file in my filing cabinet where I put tax related papers throughout the year. They are not in any particular order – just slotted in – but at least I know when it comes time to do my tax that most of my papers are in one place (because I know there’s always a few I miss each year!).
How about you? What do you do to stay on top of your tax paperwork?
Until next time, happy organising!