Not only a week into new financial year and I already had a few brief looks into my personal tax affairs for just ended 2006/2007 financial year. I like to get my tax data ready early and finish the tax return as soon as possible in order to leave dues behind which may get omitted and later start to haunt me.
Due to various reasons, this time around my tax return won’t be as straight forward as it was the year before. In fact, I somehow feel that with every passing year my tax affairs are getting more and more complex. Anyway it never hurts to get ready early and so, before seeing my accountant, I always start compiling separate spreadsheet for each of my income sources.
As each spread sheet lists all the income and expenses transaction for that particular income source I end up with number of fairly detailed spreadsheets (eg. investment property 1, investment property 2, job, shares etc.) which I than pass onto my accountant. He than fixes the details I may have put in incorrectly and lodges the paperwork with ATO for me.
I always think of having a go on lodging the return on my own, but since my tax affairs seems to grow more and more complex, I am afraid I would not be able to do it correctly and at the end every time I decide to better use the services of trusted professionals.
Gathering the information
Anyway if you like to stay in control over your tax return I learn a thing or two along the way I would suggest you to do as much work as possible yourself. There is abundance of fairly comprehensive guides and resources provided by ATO. Some of the ones I found most useful this time around are these, for financial year 2006/2007 updated, handbooks:
- Guide to capital gains tax 2007
I use this as an advisory for my CGT payable as the result of my share trades and other investment assets disposals. Don’t get intimidated by the large volume of this guide, its well written and you will only need to read the parts actually relevant to your particular CGT events ie. if you haven’t sold any of your investments during the 2006/2007 financial year than you could give it a miss. However I do recommend you to skim through nevertheless as the information provided may come of some use to you sooner rather than later. - You and your shares 2007
Short guide covering the tax obligations of share investor. Its only about 20 pages guide so nothing hard to get through within an hour or so. I find this guide most helpful for working how to treat the dividend payouts I received throughout the year. - Personal Investors guide to capital gains tax 2007
This is somehow shorter version of the first CGT document and only focuses on the capital gain tax events resulting from investing in shares. - Rental properties 2007
If you own an investment property you will surely want to have a look at this guide. It goes into all the details about the items one is allowed to claim as an expense and how to do it on your tax return correctly.
For more relevant guides you may consider look at the Investment Essentials section of the ATO website.
Finding the tax payable
Once you have all the details together, you will roughly know how much is your total 2006/2007 taxable income. All that left to do next is to run it through the 2006/2007 tax rates, which, for the individuals residing in Australia, are as follows:
+ 1.5% Medicare levy
And thats pretty much all there is to it. If you feel reasonably confident that you can do all this 100% correctly yourself than I would recommend you to use the provided e-tax services in cooperation with the e-tax 2007 software package.
E-tax is a facility provided by the ATO which, in cooperation with the e-tax software, lets you submit your finished tax return online directly from the convenience of your own computer desk. Surely the most effective tax return submission around.
However if you have even the slightest doubts about the accuracy and/or correctness of your entered tax data, do yourself a favor and use the services of tax professionals. They would certainly appreciate all the pre-works you have done for them and you can rest assured that your tax return forms are going to be filled out as they should be.
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