It's tax time again, and boy is it taxing. It doesn't have to be if you prepare well and sort out your finances in an organised manner. Whether you choose to do it yourself or go through certified tax accountants, preparation is a key factor in filing your tax returns timely and accurately. Face it, no one wants to be scrounging around for receipts and bills on the final day of filing their returns. So as an employed individual, take the time to prepare and follow these tips for filing your tax returns effortlessly.
Keep All Income Items Ready
First and foremost, you need to know what is construed as earned income. This could be your salary earnings, earnings from investments, interest from investments, dividends and income from rent. Depending on your individual situation, each of these items may contribute to your total income earned for the year and your tax will be calculated accordingly. Make sure you get your earnings statements from each of these contributors if they pertain to your situation, as you will require them when filing your tax returns either yourself or through tax accountants.
Obtain Your Pay As You Go (PAYG) Employer Payment Summary
It goes without saying that you should have your tax file number if you're a resident of Australia. When filing your tax returns, make sure you get your PAYG payment summary from your employers. This payment summary holds financial information about your gross income in the year and the tax that has been deducted by your employer on your behalf. You will need this statement for filing your tax returns.
Keep Deductions in Mind
When preparing for filing tax returns, you should be aware that you can claim deductions for certain work-related expenses. For example, you can claim tax deductions for work travel expenses. You can also claim deductions for buying occupation-specific uniforms and clothing. You can even claim tax deductions for certain gifts and donations made to deductible gift recipients. Keep in mind that you can only claim the tax deduction in the same income year as the purchase and always keep your records written, so that you know where to look when filing tax returns.
Many people prefer to file their tax returns on their own, but if you're not sure of the process then a tax accountant may be a wise decision. Keep in mind that while tax accountants charge you a fee for their expertise, the effort is well worth it. When you receive a heftier tax refund than you originally anticipated, tax accountants like CMA Chartered Accountants are well aware of certain government rules that may save you some tax dollars.