When it comes to tax returns there are two types of people. Those who have maintained their financial records during the year and those that have some receipts thrown randomly into a shoe box. Now is the time to think about a “New Financial Year Resolution”, where you will systematically keep the information, you require for your tax return as the bills arrive and are paid.
As most bills are sent digitally rather than post, the work has become much simpler. Move all these emails into one folder and save each invoice as a PDF or Image – make folders for different types of deductions.
Working with your accountant
If you use an accountant, having all your expenses listed in an Excel Sheet makes their work much easier. I find the following headings useful as you can sort using different headings:
- Date (Paid)
- Particulars
- Type – say an investment property or work related
- Category – say for investment property you have Utilities, Repairs, Replacement and Capital Expense
- Detail – where you want to provide more detail, say with repairs, they could be electrical, plumbing and carpentry
- Amount
In addition, you could save each invoice or receipt as a PDF or Image, referenced with the date (YYYY MM DD) so that all the PDFs or images are listed in the same order as the spreadsheet.
This information can be provided to your accountant in a One Drive or Dropbox Folder, or on a USB.
Using Financial Mappers to help your Accountant
The government has legislated that only those professionals qualified and registered can provide financial advice. While some accountants specializing in SMSF hold suitable qualifications to give SMSF advice, most accountants are no longer able to offer financial advice.
The accountants can, however, provide clients with taxation advice. Their role will be to help you choose a tax strategy that will suit your long term needs.
The problem is that most clients don’t consult their accountant before they make new investments. Often the investment could have provided better tax advantages if placed in a different entity.
When considering the purchase of major investments in either property, managed funds or equities, it is advisable to discuss these decisions with your accountant before you make that decision. The same applies if you have a financial adviser.
It would be so much easier for your accountant if you could give them a 5-Year Report, detailing your current and future investments and loans. This gives your accountant some insight into the types of investments you prefer and provide valuable information on how to manage these investments in a way that may help reduce your income tax and capital gains tax liabilities.
Financial Mappers for Independent Investors allows you to create a plan, listing your Objectives and Strategies to achieve your Financial Targets. When the plan has been created, you can generate over twenty reports. While financial plans can be created for periods of up to 50 years, a 5-year plan is most appropriate for your accountant.
I would suggest you select one of the following reports:
- Plan Map: gives a road map of your plan
- Plan Summary – The First 5 Years: gives a snapshot of how your plan is tracking, year by year
- Wealth Guidance Report: gives a sound overview of your plan, together with detailed information on Assets and Loans.
Financial Mappers will support you with a financial literacy program, sample plans and tutorials for different investment types. The start of a new financial year is the perfect time to plan your financial future.
If you don’t have a plan, you plan to fail
Glenis Phillips S Fin – Designer of Financial Mappers and Advice Online
Disclaimer: Financial Mappers does not have an Australian Services License, does not offer financial planning advice, and does not recommend financial products.
