Do you dread tax time every year? Instead of scrambling to find missing receipts and leaving your tax return to the last minute, get on the front foot and show tax time who’s boss this year.
We’ve put together 8 helpful tips and tricks for freelancers and sole traders who work for themselves. Who knows, you just might end up looking forward to June 30 next year.
1 Get your tax done early
Just like a bandaid, sometimes these things are best done swiftly and quickly. Don’t leave your tax to the last minute, as the time pressure will just add unnecessary stress. As soon as your paperwork comes through, get started on your tax return – you’ll be thankful you did.
2. Organise your receipts often
It can be tempting to shove all your receipts into a box with intentions to only sort them out at the end of the financial year. However, while submitting your tax return is a once-a-year thing, getting on top of your receipts should be a semi-regular gig.
3. Consider your tax deductions
As a sole trader, there are plenty of tax deductions you may be able to claim. Starting thinking about your deductions early, so you can be prepared when June 30 rolls around. From home office expenses to the day-to-day costs associated with running your business, tax deductions are an important part of small business.
4. Set aside money for tax
It can be so easy to fall into the trap of considering all your income, profit. However, if you want to show tax time who’s boss, consider regularly setting aside money throughout the year so you don’t have to live in fear of a big tax bill.
5. Pay yourself super
When you’re operating as a sole trader, it can be tempting to forget about super. While it is not mandatory for a self-employed person to contribute to their own retirement fund, it is a great way to prepare for the future – plus you can also potentially use it as a way to reduce your taxable income.
6. Separate personal from business
If you haven’t already, separate your personal bank accounts from your business accounts. It is so much easier to accurately track your income and expenditure, with accounts that have been created solely for business purposes only. It will also be a lifesaver come tax time.
7. Move to the cloud
It doesn’t matter whether your new to the self-employed world or have been on the journey for years, a move to cloud accounting software could save your business time and money. The QuickBooks app allows you to invoice on-the-go, capture receipts and instantly report on your income all from your mobile phone.
8. Hire a professional
Get on top of your tax by hiring a professional. An accountant will make tax time so much easier, as they can help you accurately calculate your deductions and ensure you’re following all your tax obligations. To find an accountant, check out our ProAdvisor program.