How can you make organizing your taxes easier?
When it comes to the end of the financial year and you have to start thinking about filing a tax return, the cold panic that everyone feels when they have to go back through their expenses, invoices, and receipts to work out how much they owe is horrible. No one enjoys filling out tax returns, but it’s a necessary chore of life for us all.
Not only this, but a smart organization of your taxes can actually be incredibly beneficial for your bank balance. Anyone who understands what to claim back on expenses, which type of tax to pay, and other tax tricks can legally pay far less than someone who blindly fills in their return.
Of course, organizing your taxes can take up a massive amount of time and energy if you’re not proactive about it. Leaving your taxes to the last moment is bad and gives you far more anxiety and stress than necessary. To help you organize your taxes better, here are a few key tips:
Keep your tax receipts
It might sound blatantly obvious but keeping your tax receipts in a safe and easy-to-find place will make your life infinitely easier.
By collecting your receipts for everything from fuel to business supplies will allow you to claim them back transparently and ensure you are fully compliant with tax authorities if they audit you.
If you run a business, set up a system where employees can file their expenses and hand you their receipts (either physically or digitally). This will make your life far easier come tax return month.
Input your tax return as you earn
To make the process of filing your tax return even easier, you should get into the habit of inputting your invoices and expenses as you go. By building your tax return throughout the year, you’ll make life far simpler when the end of the financial year comes around and you have to send it off.
While most people wait until the last moment to compile the entire document, you can simply check everything is correct and publish it. To do this, create an Excel or Google Sheets document, and input all your invoices (including dates, the customer name, and the service rendered), and also include your expenses in a separate list.
This way, you can easily determine how much tax you owe from the income and expenses you have generated.
Make sure you submit your return well before the deadline
Last, but certainly not least, you should ensure that your tax return is handed in long before the deadline. This needs you to be organized.
While you need to wait long enough to be able to calculate your full amount of yearly tax, you shouldn’t wait longer than you absolutely need to. This is because most government tax systems are inundated with users at the end of each financial year, preventing you from sending it on time.
If you’re delayed by a server problem, you may incur a late tax fine or stronger punishment through no fault of your own.