Tax time turns up every single year, so we want to make sure you’re organized when tax time rolls around again next! To make sure your tax time goes smoothly, there are things you need to do throughout the financial year. Here’s are the two most important things you need to do to save potential headaches when you complete your tax return.
Consult a professional
This comes down to personal preference, but as soon as you have details other than PAYG income and a HECS-HELP debt to record on your tax return, it’s probably time to consult a professional. Not only can a tax accountant help to make sure everything you’re submitting to the ATO is correct the first time, they will also help you legally maximise your deductions.
Having a professional complete your tax return and keeping in regular contact as an ongoing client will also help when it comes time to buy another property, finance other purchases such as a new car, or to simply verify your income if you’re self-employed. Yes, you’ll be paying a fee to have them complete your tax return, but you can claim it as a deduction the following year. Plus, the small fee now could save you potentially expensive mistakes from not completing your tax return properly.
Keep records of everything
Throughout the financial year, make sure you keep detailed records of everything. For property investors, this will include documents such as rental statements, invoices, bills, insurance and receipts for repairs and maintenance. Even if you don’t have time to fill and record everything as documents are incoming, you can keep a folder in your home office (either physical or electronic) to store everything that needs to be recorded. This will help you keep track of everything even when you’re busy and make sure you and your accountant can find everything at tax time.
Another important thing to keep a record of is when your property is advertised for rent. This will include things such as emails between you and your property manager, rental listings on property websites and calendar entries where you may have met with your property manager to discuss your property. Keeping records of these activities is important especially so you can claim deductions for when the property is vacant. Remember, you can’t claim rental income losses for the period that your property is vacant. By keeping detailed records throughout the tax year and consulting a professional to complete your tax return, you can ensure your tax time goes smoothly. If you have specific questions about your deductions or submitting your tax return, make sure you consult an accountant so they can provide you with personalised advice.
Be sure to check out our other article titled How much time are you spending on property research?