Whether you’re a contractor, run your own business or are an employee, tax time can be stressful. Before you go and see a tax professional, here are five truths about tax accounting that you need to be aware of.
1. All accountants are not created equal
Not all accountants have the same depth of qualifications and experience. You’ll find many accountants who offer bargain basement prices, but are they taking the time to understand your situation or business and giving you the best possible advice? Look for tax and accounting services that are established and experienced and have a good reputation. If you run a business or have property investments, you won’t want to engage an accountant who generally only handles relatively simple personal tax returns.
2. There may be things you can claim that you aren’t aware of
Not sure if some of your expenses are claimable? Don’t worry; just keep every financial record you can. The job of a top quality tax accountant is to advise you what you can legitimately claim from the ATO. This might be anything from petrol or office furniture to visits to inspect an interstate investment property. Far better to give your accountant all the options than miss out on a tax refund.
3. Your accountant is best kept in the loop at all times
Don’t just visit the accountant at tax time. Keeping your accountant abreast of any financial moves could save you money in the long run. If your income is increasing and you’re about to move into a higher tax bracket, an accountant may be able to advise you of strategies to minimise your tax liability. If you run a growing business, business structure and cash flow planning are just two areas in which the advice of an experienced business accountant could be vital to your ongoing success.
4. Paperwork in a shoe box is a bad idea
Try to avoid handing in your tax materials to an accountant in a bulging shoe box. This will take ages to decipher and sort, and you may incur extra charges. If you can present them with a spreadsheet or document that itemises and categorises your tax items, this will be beneficial to both of you. For business, there are some excellent and affordable cloud based accounting options – and using them may save you money by reducing the time an accountant needs to spend organising and reviewing your accounts. By being organised you’ll also be able to get a better overview of your tax and financial situation.
5. Self-employed? That tax bill will arrive
If you run your own business or are a contractor, it’s vital to have money saved for tax time. That tax bill will arrive, and you definitely don’t want to be caught unawares when it does, and be struggling to cover it. Talk to your accountant about how you can best budget throughout the year.
So, make sure you go in to your accountant prepared and up to date. Always seek a reputable experienced tax accountant, to give you peace of mind during the end of financial year stress. If you’re looking for tax advice in Sydney, why not give us a call? We’d also be happy to help at another of our office locations around Australia.