As the end of June approaches and you are being hammered with ads about end of financial year sales and deals, do you get excited about the thought of doing your tax, or are you filled with a sense of dread?
For some people, there are significant mental barriers to lodging your tax. Bobby Serval, Managing Director of Ultimate Tax & Advisory, looks at some of the barriers clients may experience.
Your relationship with money
How you were raised and how money was talked about in your family can influence how you perceive money. For some people it can make them anxious if they don’t feel comfortable with it.
“It is never too late to change your relationship with money,” Bobby said.
“While some will face social or economic barriers in childhood, how you perceive money can change over time to be a healthy outlook without fear or shame attached to earning or handling money.
“With the right guidance, clients can feel empowered to handle their finances and tax themselves.”
Not understanding what’s required
It is common for new clients to not understand exactly what is required of them and when.
Bobby said this could be people who are completing their first tax returns or when circumstances change.
“For individuals they may be comfortable completing their returns online themselves, until there are some more complex aspects to their returns such as investment properties, shares or cryptocurrency,” he said.
“Sometimes tackling the tax system can seem overwhelming for people who don’t live and breathe it everyday.
“An experienced accountant will be able to tell you everything you need to gather and let you know when everything is required. Our job is to make tax easier for you.”
Fear of a tax bill
For many businesses and sole traders registered for GST, you will often have a tax bill at the end of the year, rather than the returns many individuals may see if they work for an employer.
“We always advise our clients about how they can prepare for the following tax year to make sure they are putting enough aside to cover their tax obligations,” Bobby said.
“No one likes a tax bill and so we work with clients to make sure they are making adequate provisions and are prepared for the year ahead.”
Ultimate Tax & Advisory is a boutique tax and advisory firm dedicated to helping you understand everything tax-related – from the admin aspects of your business all the way to implementing growth strategies for your business. We provide this data as accurately as possible each BAS quarter, monthly for our full service bookkeeping clients and also with our annual tax planning meetings.
Unpaid debt to the ATO
For anyone who is behind with lodging their tax returns, hope is not all lost.
Bobby said the key to tackling unpaid debt or getting up to speed with your returns was to chat to the Australian Tax Office.
“The ATO are actually there to work with you and not against you,” he said.
“The best approach is to talk to them as soon as possible so they can work out the best path forward in making a plan to clear up your situation.
“It is important to note that the ATO has often been more lenient and willing to negotiate favourable terms with those who lodge on time, even if they have a debt, than those who miss deadlines and don’t pay.”
Another benefit to lodging on time is avoiding late lodgement fees from the ATO, which can vary based on the time it has been overdue. A warning will usually be issued by phone or in writing. If a failure to lodge penalty is to be applied, you’ll be notified in person and told of the timeframes to pay this penalty.
For taxpayers lodging via a registered tax agent, you can possibly get an extension until 15th May to lodge your tax returns, which is a great benefit to using a registered tax agent.
For more information visit ww.ultimate-tax.com.au
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