Top 6 Tax Tips for the New Year

quote 1Now is the time to make, and more importantly keep, resolutions for your financial future.  With tax season behind you, you should feel excited by the new financial year and all that it promises.  But we know sticking to resolutions is hard… because we’re busy, and we’re set in our ways.  But when it comes to your individual tax, or your business affairs, it’s really important to find time to focus on it, set it up right and put yourself in the best position this time next year.  Here are our top 6 tax tips to help get you organised this new financial year.

#1. Use your budget
We invest a lot of time in our goals and plans, and establishing a budget to reflect these is really important.  From a business perspective, it might be analysing the value of a lead and mapping out how many leads we need to convert to achieve our targets.  Your budget is a ‘live’ document. Use it, input Actual Vs. Budget, and continuously review.  It’s your yardstick, your measure of success and your guide to shaping your business strategy and forward planning.  The greatest advice this financial year after developing your budget (and plans) is to stick to it!  You can tweak and massage as you go, and be a little bit flexible, but as a rule, stick to the plan. Xero Personal is a great tool for tracking your personal finances – if you’d like some information about Xero, feel free to email us.

#2. Stay on top of your paperwork
Do you promise to be more organised next year?  Do you dread tax time because you have to sort your paperwork and receipts?  Do you put off processing your paperwork?  The start of the new financial year is the kick-start you need to take charge and stay organised.  Schedule some time each day, or week, to organise your paperwork and use folders or filing trays or a scanner to help you manage your receipts.  You can also update this information in a basic spreadsheet, or use online tools or manage your data in the cloud.  We swear by Xero Accounting software… you’ll be amazed how much time this gem will save you when it comes to record-keeping, invoicing, payroll and other number-crunching business processes. It’s vital to your business to effectively track expenses, invoices and payments.  Don’t put it off… do it today and always be on top.

#3. Get Help
It’s classic right?  You don’t know what you don’t know… which is why you should seek professional advice and get help, particularly relating to tax planning and structuring.  Perhaps the establishment of a company or a partnership or a trust could best suit your business.  Ask the experts for advice on how to utilise our tax system to your benefit.

#4. Super Salary Sacrifice
Superannuation is arguably the best tax structure available, so take the time to investigate if super salary sacrifice is for you.  This is when you ‘sacrifice’ some of your pre-tax salary into your super fund, taxed at the special rate of 15% (as opposed to say 30%).  You also benefit by compounding the growth of your super.  So while you are getting organised this financial new year, take the time to consider some of your wealth creation strategies and include the opportunity to super salary sacrifice.

#5. Think Differently
When you review your end of year results and reflect on the year that was, take time to stop and think – Is there a better way?  What could you have done differently to deliver better results?  Don’t be afraid to challenge yourself and look for a better way to work smarter, not harder.

#6. Start your Log Book Now
While you’re feeling positive and spritely about the new financial year, start recording your work-related expenses and create a log book.  You may be eligible to claim work travel in your vehicle, and if you maintain a logbook for twelve continuous weeks, you might not have to do it again for another five years.

You may also be eligible to claim expenses incurred from time spent in your home office, so keep a diary and capture the time you spend working from home.  Maintain the diary for four weeks to establish a pattern of use for the whole year.  You can also use the diary method to capture small expenses ($10 or less) limited to $200.  Start keeping good records today.

Start this new financial year on the right foot and you’ll set yourself up for the year ahead.  Email us or call us on 9887 8751 if you want to explore these tips in more detail.