It’s tax time again and for many it can be stressful. Maybe you haven’t had time to get up to speed on tax changes and don’t know where to turn for reliable information. Or the year has just gotten away from you and your paperwork is spread across various parts of the house!
While it’s easier to look away, it’s best to just confront the financial year head on and take an in-depth look at your finances.
As a busy contractor, you have enough on your plate with your work, but breaking it down step by step can make the whole process seem less daunting. Here are some tips to get you on the right track:
Tax time tips for IPros
1. Have all your records from FY 17/18 in order
It’s critical to get a process in place to manage your expenses and receipts. Home office equipment and work related travel expenses are just some of your business costs that you might be able to claim. Allocate some time each week leading up to your tax appointment to get your records and receipts in order.
Once you have a system in place, it’s just a matter of exercising discipline to ensure you create good filing habits. And remember – it doesn’t need to be an elaborate spreadsheet if you’re not Excel savvy. Just be sure to keep all your receipts and paperwork in one safe location so that you can access them when the time comes.
2. Take the time to understand what tax changes have been made and plan for 2018/19
The government has made a few key tax changes particularly in relation to rental properties and superannuation contributions and deductions. Understanding in advance how these changes can impact your financial position can benefit you greatly. If you are prepared and informed, you can plan ahead for the 2018/19 Financial Year to ensure you are generating a more effective tax outcome for yourself and your business.
3. Use a registered tax accountant with contractor experience
This is a big point of difference – they understand the nature of contracting.
As a contractor, if you don’t work, you don’t get paid, so you need to self-govern your future work and cash management. If you find you are asking yourself questions like, “Will I get a contract renewal?”, “How will I manage cash flow between assignments?”, “How do I best manage cash flow for that hard earned break?” or “Am I putting enough super away for retirement?”, then consulting a qualified tax accountant who has experience working with contractors can help you answer all these questions. Completing your tax return on your own may save you money in the short term but using a registered accountant will give you absolute peace of mind that it will be done right.
4. Review your insurances as circumstances may have changed
Things can change in your life and business throughout the course of a year, so the end of the Financial Year is a good time to review the insurances you have in place. Make sure your policies are up to date and that you are fully covered. As a contractor, minimising risk is essential, so your cover needs to extend to income and accident protection as well as your business insurances. We have a range of insurances designed specifically for contractors, so contact us today to get the right policies in place.
5. Don’t leave things to the last minute – plan ahead
As a general rule, the more you prepare for anything in life, the better your outcome will be. Careful research and planning around appropriate tax minimising financial services can benefit you in more ways than one. You can maximise your tax outcomes by considering things like novated leasing, incorporating a company, superannuation or investment options. These strategies won’t be relevant to everyone so, again, it’s best to seek to appropriate advice.
Whether you’re single, married, have a bunch of kids or none, a PAYG contractor or you’re self-employed, we have an in-house team of registered accountants who can advise on appropriate ways to maximise your income whilst operating under the rules of the ATO.
Our Entity Business and Taxation (EBAT) division is offering IPros a very special tax time package this year – to find out more about our offers or EBAT services for contractors, please get in touch with your Customer Delivery Manager or email us at email@example.com.