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Tax time is easier when you know what you need!

Published on June 28, 2016 10:58 am, by

Here we are again.  Tax time.  Whether you DIY your tax return or see an accountant, having the information you need at your fingertips will make the whole experience a lot more enjoyable.

The average tax refund for individuals over the last few years has between $2,200 and $2,600.  Having this money in your bank account accruing interest or repaying debt is a great motivation to dig those documents out sooner rather than later.

Here are the basic documents and/or amounts that you need to know before you start.

Your income:

Payment summaries – the summaries received that detail your income.  Amongst others they may come from your employer, your super fund, or government agencies.

Bank statements – you will need these to calculate the credit interest you have received during the financial year.  Alternatively your bank may provide an annual interest figure online for the financial year.

Shares, unit trusts or managed fund statements – these statements will detail any dividends and/or distributions that have been made to you in the financial year.

Confirmation of buy/sell of shares – you should hold certificates for any buying and selling of shares, if not you will be able to access from your broker.

Rental property rental statement – if you have a managing agent they will send you through an end of financial year statement detailing all your rental income any property related expenses that they paid on your behalf.  Alternatively you will need to calculate these figures yourself.

Foreign income details – collate statements for any foreign income that you received.

Remember you need to include the credit interest you accrue on any accounts you hold on behalf of your child in your income.

Your expenses:

Private health insurance policy statement – your private health insurer will send this out to you after the end of the financial year.  You need to input the figures given on your tax return (or give them to your accountant).

Medical receipts – the government are phasing out the ability to claim an offset for out of pocket medical expenses.   Before gathering receipts check your eligibility criteria, and you can claim only on the difference between what you paid and any reimbursement through Medicare and your private health insurance.

Receipts for donations – for any donations that you made to an ATO approved charity.

Educational records and receipts – see the ATO’s site for information on what self-education expenses are claimable.

Investment property receipts – if your property is managed by an agent, the end of financial year statement will include any repair and maintenance figures.  They will generally hold the receipts on your behalf.

Union membership – if you pay a union membership you are able to deduct the cost from your taxable income.

Work related expenses – Pull out your receipts and check the ATO website for information on claimable work expenses.  Not all work related expenses are tax deductible.

Remember you need to know how much your spouse or partner earns to make sure that you include this correctly on your tax returns so any entitlements you may receive are correctly calculated.

And why not get ahead for the next financial year and make it even less stress free and simple…..

For you smart cookies out there who have been using the tagging function for tax on your MoneyBrilliant account, you’ll know that all you need to do is tag a transaction as tax, and you can run a customised report at the end of the financial year showing you all those transactions collated in their categories.

How easy is that?

If you haven’t started already, the 1st of July is the perfect time to start!  It’s easy to tag your transactions as you go.  Any donations you make, work related expenses you incur or interest you pay on investments, ensure they are categorised correctly and apply the tag “tax” to them.  After the 2016/2017 financial year you can run a customised report for the financial year with any transaction tagged as tax being included.

You may wish to also use this for income, potentially tagging it with tax and your name if you share an account.  For those with multiple investment properties you can use multiple tags, potentially tagging as both “tax “and “property 1”.  You will still need to keep receipts, but this is the perfect cross check for your figures, or a simple and quick way to collate the details you need.

Related posts –
Take the stress out of tax time with MoneyBrilliant
5 things you need to know about health insurance and tax
10 ways to a more productive you

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Jen is an experienced banking professional who loves wine, coffee, finding a bargain and of course her three beautiful children. Since Jen's first budget led her to buy a home at 20, Jen has passionately helped others to make better decisions with their money.

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