10 Tips to Handle Your Tax Returns like an Accountant

Paying your taxes and filing your tax forms on time is important. Still, the Australian tax return system can be hard to understand and use for many people, even if they have done it before. As a business, you need to be proactive every financial year. However, this year, we advise you not to fall into old habits and take a strategic approach. 

Our experts advise that businesses can minimise their taxes by systematically recording their expenses with receipts. Moreover, as a business owner, if you do your taxes, it's time to scale up your record-keeping to avoid heavy penalties. People can take some easy steps to make their income taxes go much more smoothly. Instead of waiting until the last minute, preparing and starting the process early is better. Here are ten tips to help people prepare for the tax dates like an accountant.

Top ten tips to handle your tax returns like an accountant

If you plan to file your tax returns, here are the top tips you should follow.

1. Be organised 

The first thing you need to do to manage your time effectively during tax season is to get organised. You must ensure that all required paperwork and documents are in order. In addition to establishing a filing system suitable for your needs, you must ensure everything is well organised on your computer. A helpful hint is to make personalised stickers to maintain the organisation of your file system with labels. You must also be aware of all of the deadlines that have been set. Create a list of everything that has to be done and the dates by which it must be completed. You can avoid any fines and keep on schedule with this help.

2. Prepay your expenses in advance

A prepaid expense as per the ATO is deductible over the 'eligible service period'. Prepaying your expenses, such as subscriptions, training events, leases, rent, internet, phone, and business asset repairs, can help maximise your returns. 

Note: Please note any prepaid expenses shall not exceed for more than one year. 

3. Accurate documentation

Even though you do not need to submit any documents, you are required to keep them. The owners of businesses and their accountants are obligated to retain all documentation relevant to the company for at least six years. This is because the Australian Taxation Office may request the same documentation if they conduct an audit.

4. Take a good look at your stock and inventory

Identify any obsolete or damaged stock and write it down or off. This will make a massive difference in your profit margins and the value of the trading stock. Keep in mind - Consider valuing your stock appropriately every financial year, as business owners may be entitled to a deduction when the opening stock exceeds the closing stock.

5. Take your time

During tax season, you should set aside time to relax and unwind. The tendency to become so preoccupied with one's work that one forgets to take care of oneself is common. However, scheduling time for activities such as physical activity, relaxation, and adhering to a nutritious diet is essential. By doing so, you can avoid burnout and maintain your health throughout the season.

Also, it is essential to take breaks, particularly if you are feeling overwhelmed. Put your work on hold briefly and engage in activities that will help you clear your mind, such as playing blockchain games. You can return to your tasks feeling revitalised and prepared to take on the remaining responsibilities.

6. Use accounting software

During tax season, technology can be a significant time saver for taxpayers. There are a variety of accounting software tools that can assist you in automating duties and maintaining organisation within your business. In the long run, for instance, accounting software such as Zoho Books, Xero, Kashoo, and AccountEdge Pro will help you save a significant amount of time and allow you to complete your work more effectively.

Business owners can utilise accounting software such as QuickBooks and Xero to ease a certain aspect of the routine duties that their company performs daily, such as payroll or bookkeeping. Additionally, different programs can be utilised to manage documents, signatures, email automation, and other related tasks. However, modern accountants prefer to use software that already has all of these functions when it comes to practice management software.

7. Claim a deduction for managing your tax affairs

You may already know this, but you can claim deductions for preparing and lodging your tax returns. From buying tax reference material, agent's fees, or the tax-related preparation course. You can certainly claim deductions for these expenses. **Keep in mind that if you travel to a meeting with a registered tax advisor, you can also claim your travel costs. Refunds are a great way to get your money back. Read How to Get The Best of The Australians Tax Refunds. 

8. Even a donation of $1 is tax-deductible!

Any donations made, and to be claimable - MUST be made to a "deductible gift recipient". Keep in mind, private donations are not!"

You may be entitled to a deduction for insurance premiums! Yes, you read it right! Insurance premiums paid against the loss of income are entitled to tax deductions. Keep in mind that this does not include critical care or life insurance. Speak to your accountant if you are unsure! But stay away from making false claims.

9. Bad debts and financial losses

Documenting your debt as evidence of the amounts written off before the end of FY2024 can help you minimise the impact. Most importantly, there is a loss against income, such as wages and salaries. **Speak to your financial advisor for more support** Always consult an experienced professional to make the most of your business deductions. Your accountant can always support you with business improvement services such as tracking your KPIs, producing reports, claiming overlooked deductions, and filing your BAS on time! 

10. Seek the assistance of a professional

You should look for additional advice if you have a complicated tax scenario. A tax expert who is both qualified and experienced can ensure that you are adhering to the tax regulations accurately and that you are making the most of your deductions and credits. The Australian Institute of Certified Public Accountants and other organisations are members of some of the most well-known directories. Look up local tax and accounting firms in your area on the internet, and get in touch with them to learn more about the services they offer and the costs they charge.Tip: Read about How to Find The Best Tax Preparer or Tax Advisor.

Conclusion

Because time is running out, you should avoid drawing attention to yourself by submitting your self-assessment tax return late before the deadline. The Australian Taxation Office may decide to audit your financial activities due to this, in addition to the financial penalty imposed on you. If you comply with these expert techniques and recommendations, you will be able to approach tax season with self-assurance. knowing that you have a well-structured and well-informed plan for achieving the best possible results in terms of your finances. Additionally, when attempting to operate a business, you do not need to put more stress on yourself than you already are. Are you a small business owner or an individual looking to file your BAS or tax returns? Speak to our qualified chartered accountants and tax agents for more support!

Frequently asked questions

Can I prepare my own tax returns?

Preparing your tax returns can be a personal choice based on various factors, including financial circumstances, complexity of the tax situation, and level of comfort with tax-related matters. While it is not illegal for individuals to prepare their tax returns, it is generally not recommended for everyone. Therefore, you can prepare your tax returns, but consulting with a tax professional or accountant is recommended to ensure accuracy and compliance with tax laws.

When should I file my tax returns?

Your tax return must be submitted by the deadline for the fiscal year beginning July 1 and ending June 30, 2024. If you seek assistance from a Registered Tax Agent such as The Kalculators, the deadline will typically be later; nonetheless, you will still be required to meet with them before the second to avoid incurring penalties. Alternatively, you can apply for an extension. Remember that it is preferable to file a tax return that is complete and delayed rather than one that is incomplete and filed on time. Always check out The Key Dates of the 2024 End of the Financial Year.

How do I ensure that my tax returns are secure?

To ensure the security of your tax returns, consider:

• Using encryption software to protect your electronic files
• Storing hard copies of your returns in a safe place
• Providing only necessary information to tax preparers or accountants

What if I have made a mistake on my tax returns?

If you discover a mistake on your tax return after filing, you can file an amended return to correct the error. You could be required to make changes to your tax return if you have made a mistake when responding to a question, you have neglected to include some income or a capital gain, you have forgotten to claim an offset or deduction, or something has changed after you have filed your tax return. It is important to act promptly, as there may be penalties for filing an amended return after the deadline. If you find an error or omission in your tax return, you can use the amendment process to remedy it. If you believe the ATO has processed your tax return incorrectly, please contact them. There is a possibility that they will be able to eliminate the requirement for an amendment.

When should I hire a tax professional or accountant?

While preparing your own tax returns may be possible, there are certain situations where it is advisable to hire a professional tax professional or accountant, such as:

• You have complex tax situations, such as multiple sources of income or deductions.
• You have foreign sources of income or investments
• You are self-employed or have your own business
• You are facing tax audits or tax controversies