complete order 2015

TAX TIME ORGANISATION

Disorganisation is one of the most common reasons why we put off lodging our tax return. If our tax papers and receipts are not filed or in any logical order, the job becomes too hard and overwhelming, so it just gets put off. However, if you have an organised tax filing system, the process is much simpler, quicker and stress free.

A tax filing system needn’t be as arduous as it sounds, it just requires a designated system be in place every year so that the volume of paper clutter doesn't get out of control. If you get control of your tax paperwork this year, it will allow you to start your new tax year off with a clean slate.

CREATE A TAX FILING SYSTEM

The first step to setting up your tax filing system is to gather all of the tax-related paperwork that’s lying around your house and sort them into chronological order (month by month).

Make a 2015/2016 file – it can be a box, a manila folder or a binder. You may also want to have several sub-folders within each financial year’s folder (such as income, expenses, deductions, miscellaneous). Depending on your situation, you might also like to create folders for assets, investments or other deductions.

If you have a large volume of receipts or other tax-related documents, sort the paperwork into smaller subcategories (eg. car, phone, travel, office expenses, uniform, bank statements, donations, etc.) and place them in separate folders or plastic pockets. Assign different coloured folders to each of the main categories so you can quickly identify what folders belong to each group. Sort through all of your receipts and circle or highlight the date and the amount of each receipt, organising them into months, July through to June.

Replicate the same folders on your computer so you can file electronic receipts, invoices, bank statements and other digital tax-related documents in the appropriate folders as soon as you receive them.

Tax records can be kept in either hard-copy or electronic form. If you have an aversion to clutter or don’t have a lot of storage available, scan and save electronic-copies of your receipts and other essential tax documents to your computer (or external hard drive) and throw out the paper version. Always make a backup in case the files are accidentally deleted or become corrupted.

HELPFUL TIPS

Every couple of months, clean out your wallet, car, briefcase and handbag and place all the receipts into your tax folder. Regular maintenance is the key to keeping a really good filing system. This will prevent a backlog at the end of the year and (hopefully) stop receipts and other documents from becoming misplaced or lost.

There are many apps that help track your receipts such as Shoeboxed Australia, Expensify and ExpenseMagic that you can start to implement and use for the coming tax year. All have different functionality that allow you to capture and store relevant tax information on the run and some apps will even consolidate that information with your accounting platform.

Only keep the documents for the current year and the previous year close by (the rest can be archived and filed elsewhere in your home).

The ATO website provides a comprehensive list of deductions you're able to claim as well as other useful information relating to lodging your tax return. www.ato.gov.au

Don’t strive for the perfect file, it doesn't exist!  The priority is just to have it all together in one place that’s easily accessible for you and your accountant.

THE NEW FINANCIAL YEAR

The start of the new financial year is the perfect time to put systems in to place to make the process easier next year. Plan ahead and file paperwork monthly to avoid the hard task of having to deal with it all at once.

While setting up and maintaining your tax filing system isn’t a particularly fun chore, you’ll definitely be thankful that you persevered with the project (as will your accountant) at the end of the financial year, as your beautifully organised records will make lodging your tax return easier, quicker and hassle-free.

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