Tax time is around the corner and it’s time to start planning.
The businesses and individuals who spend May and June preparing for EOFY find things a lot easier after July 1st. They also find they get more from their tax return.
Here’s why tax planning makes sense:
● Get the most out of your return: You can do all the last-minute calculations you like, but without planning ahead you aren’t likely to get the best possible return. Doing your return early gives you the chance to attend to every little detail and find every possible claim.
● Peace of mind: Getting a head start on your taxes means that when the time comes, you will know everything is under control. The tax deadline creeps up quickly so you may as well do some groundwork ahead of time.
● Get your return more quickly: If you’re ready well ahead of time, you can submit your tax return right away and be first on the list to be processed. This will give you extra time to come up with additional funds to pay your tax bill if you need to do so.
● Avoid the audit: Audits can be an unpleasant affair. Sometimes they do come out of nowhere but they are usually triggered by an issue with a tax return. Doing your taxes last minute increases the chance of a mistake.
Mistakes on your return can look like attempts at fraud, and the next thing you know, the taxman is at your door. Get everything ready early so your tax accountant has plenty of time to check things in detail.
● Assess your finances: Doing your taxes is also an opportunity to do a deep dive into your financial status. For businesses, it’s a chance to check invoices and look at your top and bottom lines. For individuals, it’s a wise time to check your expenses and running costs and see what might need changing. If you’re rushing through your taxes at the last minute, there is less time for careful evaluation.
● Stay on top of ATO changes: The ATO is always making changes to rules and regulations. Start your taxes early, and you will be able to stay on top of any recent changes that might affect your return.
● Stay on top of your budget: Getting your taxes done early can give you an idea of the size of your tax bill. This knowledge can be invaluable to managing your budget in the coming months. The last thing you want is the painful surprise of a large tax bill to deal with and very little time to pay it.
● Your accountant will have more time for you: Tax accountants get very busy in July. Having them look at your taxes earlier means they will have more time to dedicate to you. Tax accountants will always work hard to get you the best return and lowest bill, but they are only human. Giving them the opportunity to work for you when they are less swamped will make it easier for them to do the best job.
One tip to remember; doing your taxes early doesn’t mean you have to lodge them with the ATO straight away. Your tax accountant can let you know what the outcome is. If you will owe money, you can buy yourself some time before you lodge. If a return is coming to you, you can ask your accountant to submit your tax return asap.
To really get ahead on your tax planning, talk to a tax accountant from Mobbs & Co today.