Essential Tips for Filing Tax Returns as a First-Timer
Posted on: 30 December 2020
Paying taxes is both a moral and a civic duty, which every person who earns an income must undertake. Unfortunately, most people who do not prepare well for tax return filing are always quick to complain about the complexity of the process. Consequently, new employees develop a phobia for preparing tax returns from the word go. Nonetheless, there is no need to dread the process, even if you are filing tax returns for the first time. The exercise is not as complicated as people make it seem. This article highlights essential tips to help you breeze through the tax return preparation and filing process.
Please Do Not Delay, Even with Missing Figures -- A common misconception among first-time tax filers is that they should wait for paperwork to confirm the accuracy of all figures. However, waiting too long to file your returns causes delays, and the Australian Taxation Office will fine you heavily. Therefore, rather than miss the deadline as you wait to receive the final paperwork and the correct figures, it is advisable to file your tax returns using estimates. It allows you to submit an amendment with the tax office via their online portal and avoid a penalty. However, you must ensure that the calculations are reasonable because the ATO will fine you if they believe that you intentionally provided the wrong information to beat the deadline.
Gather all Relevant Documents -- The only way you can file tax returns accurately is by having all the relevant documents. However, finding documents such as bank statements, payslips, statutory declarations, and dividend statements can be time-consuming. Therefore, you should compile all records long before you begin filing tax returns. The best strategy is to keep the documents within reach by filling them accordingly. If you lose some physical receipts, you can still use your bank or credit card statements to fill out your returns. Notably, skimming through months of bank and credit transactions to locate relevant expenses for claims can take time. Therefore, you must begin the process early enough to avoid filing your returns late.
Hire a Tax Preparer -- Unless you have a tax accounting background, the chances are high that you will take some time to acquaint yourself with the jargon. As a first time filer, you will likely miss the deadline if you do not begin filing your returns early enough. Thus, it is advisable to hire a certified accountant or other tax professionals to help you prepare tax returns. The expert you hire must navigate the tax filing process with ease. They should also point out any red flags with your documentation early enough for corrections.
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