Get prepared for tax time
How being organised can save you money to put toward your home loan instead
Tax time can be stressful, but with a bit of preparation and organisation, you might be able to save yourself time, energy, and most importantly, money. The additional funds will be particularly useful if you’re looking to apply for, or make extra payments toward your home loan.
Develop a system
It’s important to keep a clear record of your incomings and outgoings throughout the year. Put aside time at the end of each month to enter your deductions into a spreadsheet, and keep all your tax related paperwork together. Develop a simple filing system categorised by months so you can locate things quickly when you need them. Bear in mind most lenders require the past two year’s worth of tax returns to show consistency of income, particularly if you are self-employed. Banks want to see a maintained level of income so they know you’re in a position to service the loan.
Understand what you can claim
What you can claim depends on the job you have. Do your research beforehand to avoid saving irrelevant receipts. If you are claiming on an investment property, find out what is and isn’t deductible. Keep all paperwork relating to:
- Council and Water Rates
- Strata Levies
- Agent statements
- Bank fees
- Borrowing costs
- Repairs and Maintenance
- Interest on loans
- Travel expenses
- Renovations/improvements on the property
- Land Tax
Talk to the experts
Your accountant can provide you with useful advice regarding your tax claim, as well as tips on how to organise your records and simplify your returns in the future. If you have recently bought an investment property, you’ll save time and money by getting your claims right the first time. Make sure you provide your accountant with all the necessary paperwork, including your purchase settlement statement, loan offer document and depreciation schedule. If your property is still under construction, you’ll be eligible to claim interest and holding costs in most cases.
Educate yourself on what you can claim, as well as the tax implications of your investments. If you understand why certain documentation can help you at tax time, you’ll be able to save time preparing for the following financial year.