All About Tax Records

Tax time comes around once a year, but you should be conscious about it all year-round. It is up to you to make sure you keep your receipts and know how much tax you can claim back. This is why it is important to be conscious and keep all your big purchase receipts or business expenses.

Even if you’re not sure, it’s better to be safe than sorry so that when the time comes, your Heidelberg tax accountant can help you efficiently and effectively. That’s why for today’s blog, we’ll be looking at why you should keep your tax records and what exactly you should prepare for your tax accountant in Heidelberg.

The benefits of keeping tax records

There is a myriad of benefits that come from keeping your tax records. Other than the fact that you are legally required to keep these records for at least five years, keeping them can also greatly assist your Heidelberg tax accountant to help you come tax time. Some of the other benefits include:

• Physical, written evidence of your income and expenses
• Making sure you’re able to claim your entitlements
• Proof in case you’re asked by the ATO (Australian Tax Office) to prove the information
• Avoiding penalties
• Easy resolutions to any problems

Bringing your records to your accountant

When it comes to tax time, you will sit down with your accountant and go through all of your records to work out exactly how much of the tax you paid you can get back as well as expenses that you can claim. To make it easier on yourself and your Heidelberg tax accountant, it’s a good thing to keep your records sorted.

Ideally, you’d do this throughout the year but doing so before you meet up with your accountant still has the same effect. This will minimise your time spent with them which will, in turn, decrease the cost as they typically charge by the hour. If your records are a mess, then you’ll end up spending more time and money with your accountant trying to sort through them all as well as actually checking them all.

The different types of records you should keep

The following types of records are the sort that you should be keeping records of:

• Received payments– These can be payslips for your work salary, or if you received a payment from investments then written proof of that is required. This can also include government pensions or other benefits.
• Expenses related to received payments– Essentially this is any of your own money that you’ve had to spend in relation to work. This could be a uniform, travelling – both land and air – educational courses to further your role in a company or rental expenses.
• Asset acquisition or disposal– This is fairly self-explanatory, any document which proves the date you acquired or disposed of the asset as well as when the Capital Gains Tax (CGT) occurred will suffice.
• Donations, contributions and gifts– If you’ve made a contribution, donation or given a gift to an organisation then you’re able to claim it back on tax as long as you have written proof. A receipt, signed letter from the organisation or PAYG payment summary are all appropriate documents for this.
• Disability aids or aged care expenses– Receipts and documents showing the appropriate information can be used as sufficient proof.

How to organise your receipts and records

A common way is to use a filing cabinet. This way you can organise your records in a variety of different ways, including:

• By month – This is where you simply file away the record under the month it belongs in, and within each month’s folder you can have it organised alphabetically starting with A at the front for example.
• Alphabetically – This is essentially similar to by month but the other way around. You would file the receipts under what they’re alphabetically first and then within each letters section you would file it by year and month starting with the earliest at the beginning, adding to the back of the folder each time.
• Organising by the type of record – This is a bit of a more tedious way but if done correctly, can look very neat and organised. You essentially would have various folders or draws all based on what type of record it comes under.

Looking for a tax accountant in Heidelberg?

If you’re after a Heidelberg tax accountant, then Silverdale Consulting Group is the firm for you. Our highly qualified and friendly accountants are ready to work with you on a variety of services including tax accounting.

If you would like to get in touch with us to learn more about what we can offer you, then please give us a call on (03) 9497 5885 or send us a message through our website.