When it comes to filing your income tax return, having a personal accountant can prove invaluable. Take advantage of their expertise and experience by asking them lots of questions. The more you understand what you need and need not do, the more efficient the process will be and the more money you could save if you’re paying more income tax than needed. So where do you begin?
The starting point of all of your questioning should be: how can you start preparing to reduce your next bill? Keeping this in mind as you are filing your income tax return is the basis for the conversation with your personal accountant, who will be more than happy to go through this process with you.
1. What expenses are deductible and does this include health and pension contributions?
Naturally, you will be looking to maximise your deductions but it is important to know exactly what you can and cannot claim, not least because you can start collating and retaining the relevant receipts, invoices and bills of payment. Your personal tax accountant will signpost you to the expenses you can claim and, as they get to know you and your circumstances, will also identify some other areas that you may not have realised are claimable.
Some expenses are only partially deductible, so if you run an office from home but your Internet access is used not only by you but by your family as well, then you may only be able to claim a percentage of this cost against your business. If you are self-employed and paying for a health care plan in your name, then this is also an expense that can be deducted. However, if you are covered by your spouse’s employer’s plan, then this is not a deductible business expense. Your personal accountant can also advise you on whether or not your superannuation scheme is fully deductible as well.
2. What, if any, are some of the changes that are coming up in the tax regulations that could affect my income tax return?
As busy people, we don’t always have time to keep up with the new laws and regulations being implemented by the ATO but your accountant does. Knowing of any changes in advance will help you plan and manage your finances for the year ahead and, again, ensure that you are keeping and retaining the relevant documentation.
3. What should I be doing to reduce or save on next year’s tax bill?
This is where your personal accountant can really work with you to structure your finances, thereby ensuring that you make the most of the money you earn. He or she will be able to advise you on the family budget and accounting, and signpost you to ways that offer leverage on any tax breaks and available deductions, all so that you won’t end up paying more tax than necessary.