It only seems like it was yesterday that we started the new financial year and now with one month left to go, many of us are wondering what we should be doing to get ready for tax time. Getting ready to do your tax can either make you feel anxious or serene but if you take the time now to do some of these tips, you too can become one of the serene.
1. Have an awesome filing system!
Odds are you’re not going to look at that piece of paper again after you enter it into your bookkeeping software but if you file your accounts correctly it makes answering all the hairy questions accountants throw at you much easier. I always file documents with the view that I’m going to be audited tomorrow. No I’m not a pessimist but rather a planner. If I file correctly the first time, I don’t have to do it again AND I can find stuff when I need to.
Your filing system could consist of binders, an expanding file or even hanging files in a filing cabinet. The key is to set up a logical system and then consistently file your documents.
2. Find a rock star accountant to look after your income tax needs
Not all accountants are rock stars. Some are only interested in getting as many people through the door to get their income tax returns completed. I call these types of accountants ‘compliance officers’. There’s nothing wrong in using this type of accountant but if you’re looking for someone to really partner with you and who can advise you in all areas of your business, you’re going to have to look elsewhere. A really good accountant, ‘a rock star’ will anticipate your needs and will keep in regular contact with you throughout the year and not just from July through to October. They’ll also have other complimentary services to offer you that just make life as a small business owner much easier to deal with.
3. Talk to your accountant before making any major decisions
Once you find your rock star, check in with them before 30 June. There may be tax concessions ending by that date that you may be able to take advantage of. They’ll be able to advise you on what to do to reduce that profit or to ‘use’ up that capital to reduce your income tax. The key is to contact them early enough so you can act upon the advice they give you, should you choose to do so.
4. Get a bookkeeper
There have been some major changes within the bookkeeping industry over the last 12 months and needless to say, if you have a really good bookkeeper on your team, not only will it save you time, it will save you money. Just like accountants, your bookkeeper should be able to offer you more than just ‘data processing’ or be a software user. They should be able to teach you in greater detail about the financial management of your business. They should be able to partner with you to allow you to grow your business.
5. Book in your appointment today!
Don’t wait. Book it now and make sure you book your partner in at the same time. Your accountant is about to enter their busiest time of year and they may not be able to fit you in straight away. In booking your appointment earlier, you’ll have a deadline by which to get ready and your accountant will love you!
Getting ready for tax need not be a race or a panic. In undertaking a few of these tips you’ll ensure you’re more than ready for tax time.
Kylie Short, owner of Tilda Virtual specialises in providing bookkeeping, BAS Tax Agent Services, administrative support and general Virtual Assistance to consultants, speakers and home-based businesses. Visit her website at www.tildavirtual.com.au to find out how Tilda Virtual can help your business grow.