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019: Filing your tax return
444 Plays5 years ago
This episode will help you set up your systems to make tax time as minimal as possible.
People whose lives are otherwise in good shape can suffer a mental block when it comes to tax. This episode will give you tips to get motivated and preparing your tax return more efficient.
Mia and Dinah discuss:
- motivations for doing your tax by the deadline
- the benefits of using an accountant or tax agent
- why you might want to see your accountant before tax time
- thinking about your tax refund as a payment for the work you need to do
- options for setting up an online filing system to keep tax records
- using scheduling to set aside a time to do your tax return
- rewarding yourself when you get your tax return done.
- Mia discusses how she organised her son’s birthday in one Power Hour : finalised the guest list, booked the venue, bought gifts and invited family for a separate get together
- Dinah talks about how she cleared out the 16,000 unread emails in her personal email account
- Mia talks about a visit to Centrelink to sort out her Child Care Subsidy
- Dinah talks about the difficulty in banking a cheque
Book - Mentors: How to Help and be Helped by Russell Brand
RESOURCESmyDeductions - ATO app to save your receipts
SHAREPlease head to the Life Admin Life Hacks Facebook page to connect with listeners and share your thoughts, questions or suggestions.
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Transcript
Introduction to Life Admin Hacks
00:00:00
Speaker
This is Life Admin Life Hacks, a podcast that gives you techniques, tips, and tools to tackle your life admin more efficiently, to save your time, your money, and improve your household harmony.
Meet the Hosts: Dunera & Mia
00:00:11
Speaker
I'm Dunera Roberts, an operations manager who loves getting a tax return done in the first week of July. I'm Mia Northrop, a researcher and writer, and my husband and I are two years behind in our tax.
Why Are Taxes Inevitable?
00:00:25
Speaker
This help will help you get your tax sorted so you can stop having that feeling of dread every time you think about it. Hello and welcome to Life Admin Life Hacks. I think we use this quote when we did our episode on wills, but it's pretty true that there are two things in life you can't avoid, death and taxes.
00:00:46
Speaker
Unless you're a criminal, you don't do tax evangelist games, then it's just death you have to worry about. It's very true.
Tax Preparation: Why It Matters
00:00:54
Speaker
This episode is scheduled to publish around the end of the financial year in Australia when it's time to launch your tax return. In fact, I think by the time many listeners download this ep, you probably have already launched your tax return. Probably true. Although we might be talking about the Australian tax office and our tax system here.
00:01:14
Speaker
Our preparation tips will help all tax paying citizens everywhere. So I looked back at our survey stats. I list a survey that we ran last year and a third of our audience prioritised saving time. Another third prioritised saving money in terms of ground priorities of life admin. So our tax prep tips today will ideally give you both.
Procrastination and Tax Timing: Is It Worth It?
00:01:37
Speaker
Yeah.
00:01:38
Speaker
It is actually also a legal requirement to prepare a tax return. So it is an important thing to do. Here in Australia, there's a penalty for late lodgement. It can be up to $1,000. Interests can be payable about 10% per annum if you owe tax. It's also important to know that even if you owe to refund, you can still get a penalty for late lodgement. Really? You can. There are a lot of people out there whose lives are otherwise in very good shape. Like you, Mia.
00:02:07
Speaker
Yeah. People are the way other people like this is a mental block, but you know what? I'm fully blaming my husband on this. I'm sorry, but let's just, let's just call it out because we get behind because he has a small business and takes them ages to do their finances and accounting. And we have to wait until their tax is sorted before we can do our personal tax. And that,
Motivation for Timely Tax Returns
00:02:37
Speaker
always seems to happen just as the silly season hits in November, December. And then, you know, we don't have our mind on tax. We're busy getting ready for Christmas and holidays. And then suddenly it's June the next year. We still haven't got around to it. I was actually speaking to a few people as I was planning this episode about why
00:02:59
Speaker
They haven't done their tax return. And I think, you know, some of those people might have been speaking to me. And it's interesting that they say it's the double whammy of something that they're a little bit afraid of because they don't understand it. And it just being a little bit boring. And so those two things in combination make it just such a blocker for some people.
00:03:18
Speaker
Often it can even be for people who are due a
Tax Planning: When to See an Accountant
00:03:20
Speaker
refund. And I think it's so funny that they can't get motivated to do a little bit of work to get that cash in the bank, because really it's it's like, you know, working for a paycheck. I had a look at some stats on the Australian Securities and Investment Commission website, their money spot site. The average tax refund is two and a half grand. So if you think, OK, this might take me three hours to sit down
00:03:45
Speaker
or even if it takes you a couple of nights and you spend five hours, that's like $500 an hour to get you this refund, if you think about it that way. You can often need that information to fill in estimates for government allowances like the childcare subsidy. So if you don't have the information up to date, then you might get underpaid or overpaid, which can create lots of complexities down the track.
00:04:08
Speaker
Yeah, and I've started getting those letters about, you know, we need an updated family income estimate so we can make sure you're getting the right childcare rebate. There is a domino effect when you start getting late on your tax. You know, a lot of people use that money to pay bills. Some people add it to their savings. Some people put it up towards their credit cards or stashed away for emergency. Some people splurge with it. What do you do if you get a tax refund, Diana?
00:04:37
Speaker
I think it's a little bit of both. So we often do have a little splurge that we think, oh, let's use that tax refund money to, you know, book a little weekend away or something. But a lot of it just goes into paying off our home loan. What about you, Mia?
00:04:51
Speaker
Yeah, it just goes straight into our offset account if we get a refund. I think that's another thing, you do this work and it just sort of goes into this massive vat of debt. So, it's like a drop in the ocean. Tax is one of the few activities that our survey respondents said they shared equally with their partner if they have one.
00:05:10
Speaker
And almost 70% of respondents said they outsourced their tax preparation to a tax agent, which
DIY Taxes vs. Professional Help
00:05:17
Speaker
actually reflects the Australian average. So most people actually think that their tax situation is quite all sorted. Hopefully this episode will focus on giving you some efficiencies.
00:05:27
Speaker
And when you're thinking about tax returns, I think you also should think about tax planning, which is preparing ahead of the time when you have to submit your tax return. And if you are going to see an accountant, it's usually a good idea to do it before the end of the year. So, you know, if you can should be doing some things to optimize your tax for that particular year, like paying for income protection insurance or making extra superannuation contributions and what records you should be keeping.
00:05:56
Speaker
if you want to claim things like home office deductions or a logbook for travel expenses. So Diana, are you a CPA? No, I've never actually been a CPA. So I just worked in a tax practice of a big accounting firms. I don't have an official qualification, but I think I know enough to be dangerous in terms of certainly enough to prepare our tax returns, which aren't particularly complicated.
00:06:25
Speaker
When you said that, I just had this vision of you turning around rapidly, flicking your glasses down and just wielding a calculator wildly. Enough to be dangerous. Okay. But you don't guys don't see a tax accountant or a tax agent because you've worked in tax for a chunk of years.
00:06:44
Speaker
No, but I actually have gone to see a tax accountant to get some specific tax advice, although I didn't feel like I needed them to prepare the tax return, but just to confirm the specific treatment of certain items. And so I do think it's worthwhile if you have something a little bit more complicated and you need
Organizing Tax Records: Tips & Tools
00:07:02
Speaker
some advice. For those that don't use a tax accountant or agent,
00:07:05
Speaker
those preparation fees are tax deductible. So whatever you spend on their service, you can actually claim with the deduction. And we certainly use an accountant to cover the complexities of my husband's business and our family trust and all of the complexities in our current financial situation. And it can be a real motivator to get your tax return done if you book in the appointment with your accountant. And so you're sort of forcing yourself to get all the documents ready for that visit.
00:07:32
Speaker
And if you don't have an accountant, it's really the best thing is to ask for recommendations from your friends and make sure you find out how much they're going to charge before you get there. There are actually some online services now which can assist if making the time for a visit to an accountant during office hours feels too hard.
00:07:50
Speaker
So our tax record system is the last bastion of paper in our house. Apart from really ancient tax records that I could just read, the current records are still in folders. So we have these file folders set up as a new folder for each financial year. And each folder has dividers for your payment summary or notices of assessment.
00:08:11
Speaker
income rental income on expenses bank statements for interest in fees and there's other sections for dividends and deductions and donations and that private health insurance statement any tax advice or correspondence we have.
00:08:26
Speaker
During the year, if I get any hard copy receipts or letters or any paperwork that's relevant, I just shove it into that folder. And if I get emailed anything during the year, I save it in an email folder that's just called DAX. I have changed for the next financial year. So now that we've got Google Drive set up, I've actually replicated that folder structure in Google Drive. So now that most of those documents are going to come in as digital files, I can just flip them in there and file as I go.
00:08:56
Speaker
But really
Efficiency of Online Tax Filing
00:08:57
Speaker
with the paper stuff, I've just got a little spreadsheet that we create or template that we've been using for ages and I put the figures in there. And then all of that goes across to the accountant with the receipts and the statements. What's your system? Well, I've actually been keeping our tax information online for a number of years. So all that really changed when I moved to Google Drive was rather than saving it on the hard deal.
00:09:22
Speaker
I'm now saving it in the cloud, which has actually made it way easier because it means even if I make a small donation, I get a $10 receipt. I just quickly snap a photo of it and upload it straight to the Google Drive and I can throw the receipt straight away. So it means I'm really keeping all of those records in one place.
00:09:43
Speaker
Before we had the Google Drive, I did also use the ATO. They have an app called MyDeductions. And if you put information into that app, it actually uploads those straight to your tax return if you're doing it yourself online, or it can also email to your tax agent. So if you don't already have an online filing system sorted out like a Google Drive, it might be worth considering using that ATO app.
00:10:10
Speaker
And do you lodge your tax using the online eTax site? I do. And it's so easy now and it's getting easier every year because a lot of the information's already uploaded. This will be the last year anyone will be getting group certificates or payment summaries because single touch payroll is coming in. And so now all of your salary information will be automatically uploaded to your tax return when you do it yourself or a tax agent does it.
00:10:38
Speaker
Yeah, I agree. The last time I did look at e-text, I was amazed at how much data it had just sucked in from the various sources. It was such a relief.
00:10:46
Speaker
Kind of scary that all these things are synced up, but convenient. It is. And to be honest, it really only takes me probably half an hour to do my tax return because all of the information's there and it's all really super fast.
Staying Organized for Timely Tax Completion
00:11:04
Speaker
So I definitely don't see any value in getting an accountant to do it.
00:11:08
Speaker
Yeah, I would like to return to the simple day, so we did it ourselves in some way. So at the moment, we sent all that stuff off to the accountant. The accountant sends us back a paper copy of the tax return to review and approve, and then they lodge it for us. But given that we are lodging so late in the piece, like, you know, years, months after the deadline, at least we get that tax agent, uh, concession, time concession is on our side. So it's kind of important at some stage.
00:11:39
Speaker
Yeah, because if you don't have a tax agent, you are supposed to lodge your tax return by the 31st of October. But if you've got this tax agent, it really depends on what level of taxpayer you are. You often get until February or March. Sometimes I think even later to actually submit the tax return.
00:12:00
Speaker
Yeah, so it's worthwhile to get their expertise as well as the flexibility with the lodging date. According to the Money Smart site, 84% of people lodge on time, which I was like...
00:12:11
Speaker
Well done, Australia. Good on you. I think that's impressive. So I do think a lot of people are motivated by the Reeve Fund and it is really best to actually do it as close to year end as possible because it's much easier to remember things that you might be able to claim before too much time's gone on. And even if you do have to pay tax, you can always prepare your return and then lodge it later. Just because you've prepared it doesn't mean you have to press submit now.
00:12:39
Speaker
And when do you do this? Do you use your power hour time to prepare all the material and ship it off, even though it's only taken you half an hour? I often schedule it in because I do like my husband to be around when I do it in case I've got any questions for him just to make it as efficient as possible. So we're actually talking about on the weekend about what day we were going to schedule in to do our tax return in early July. I'm just thinking right now, Diana, you are a dream spouse.
00:13:08
Speaker
I would love it if I could just be hovering, flipping through a magazine in another room while my partner calmly does our tux. It just pulls out for me for that odd clarification. Oh, God. You know, we usually have...
00:13:24
Speaker
a series of nights where we can begin and persist after the kids have gone to bed. But I like the idea of in the future, I was thinking about when you said the other week about giving yourself a little treat after, after doing some things. Was it when we went out for lunch? Yeah, I'm thinking in the future, we will, you know, we'll have our online cloud based storage system.
00:13:50
Speaker
We will do it all in one hour and then we'll go out for dinner afterwards and somewhere delicious and notable so that there's this nice kind of culmination instead of the years of chaos that we've experienced in the past to just change the whole way we
Life Admin Wins: What's Your Latest Achievement?
00:14:07
Speaker
And it's interesting because I've been talking to a few people about this and the people, you know, they just seem to be these kind of two schools, the 80 percent of people, obviously, who I think do it as soon as possible, get their information, get it often. And it's really not a major.
00:14:22
Speaker
a thought process for them, I think, because it's done so quickly. And then the other percentage of people who put it off, put it off, put it off, who, you know, whenever they talk about it, it fills them with dread and yet they still can't get motivated to do it. So much better to be in the 84 percent, I think, than in the other side.
00:14:45
Speaker
Oh, I'm not used to being on the crappy side of percentiles. Doesn't feel good.
Balancing Tasks: Email & Event Planning
00:14:50
Speaker
OK, Dime, let's talk about a life admin high of the week. Enough with the text. Well, I know that whenever you used to look at my phone, you used to get quite concerned about how many unread emails I had in my personal email inbox.
00:15:07
Speaker
And so I spent a few hours and I've actually cleared out all sixteen thousand of the unread emails in my inbox that actually were mostly around, you know, about three years ago when I really lost control of my emails and subscribe to too many newsletters, etc. And it didn't take that long and now I have
00:15:29
Speaker
not inbox zero, but unread zero, and it is much better. 16,000 diner. Let's just do a little clap. That's amazing. I think we all know people, we glance at their phone and there's that little red number of the, you know, the unread emails. And I just, my eyes popped out of my head when I saw the 16,000 meals. So how did you do it?
00:15:55
Speaker
How did she get through that many? So in the past, I'd always tried to do it on my phone and it's too hard to do it on your phone. So I actually just sat with my computer while I was watching TV and sorted them by unread. And when I scrolled through them, I'd say 95 percent of them were email newsletters or things I've subscribed to. So I just selected 100 at a time and I actually just deleted them. I didn't even because
00:16:21
Speaker
they weren't things i needed so not only did i get rid of the unread i actually got rid of them out of my inbox altogether i don't think i can ever get to inbox zero i have no idea how many actually in the inbox but it does feel much better now that i can see much more easily how many emails of coming in rather than.
00:16:40
Speaker
have no idea actually, which is how it was in the past. That's incredible. Well done. I'm not going to tell you how many I have in my inbox, but I'm on the, I'm on a good percentile for that. I have, I've returned by, I have nine, I have nine emails in my inbox. There you go. Okay. Life had to be right for me.
00:17:07
Speaker
I organised my son's sixth birthday in one power hour. I got the guest list, I booked the venue, I bought the gifts, I invited the family for the family separate get together thing. I organised the whole thing. I bought the pinata. It was so satisfying.
Handling Unforeseen Admin Issues
00:17:25
Speaker
I just sat there and like, how awesome. That sounds amazing. Downloaded the invitations from the website, flung them out to everybody. Boom.
00:17:35
Speaker
Wow, that is epic. Yeah, it was very productive and now all I have to do is we can just talk about the cake for the next month. What kind of cake he wants? Because that'll change. We'll go through a few preferences before he lands on the final thing. But yes, that was definitely a high. Did you have a low?
00:17:55
Speaker
For some reason the childcare subsidy had stopped being paid to my son's aftercare at school, just out of the blue. He's been going there for a couple of months, just once a week. But then I realised I was, you know, it's one of those direct debit statement things where it just chugs along and I don't normally look and then one day I opened it up and I'm like, hang on.
00:18:15
Speaker
Where's the subsidy? I had to actually visit a Centrelink office because I don't know what it is, but you call up and you can never actually talk to a human. It's like entering a maze. My MyGov website link didn't work. So I had to go to Centrelink and walk into that soul destroying decor and stand there in a queue of two people for what seemed like way too long.
00:18:40
Speaker
But you know what, I actually got quite prompt service and they mostly resolved my issue when we're on top of it. But anytime you actually have to go into Centrelink, it's not a high point in life. Is that not now the MyGov app? Did my all just, every time I go to Centrelink on Medicare, it says, go to MyGov. Anyway, it's resolved now.
00:19:10
Speaker
That's good. And you? Hello? I sort of had a, it felt like a retro problem. Someone sent me a cheque. It's been such a long time since I've actually received a cheque.
Book Review: Expanding Mentorship Perspectives
00:19:28
Speaker
I had to actually, it was a refund for something and it was actually quite a lot of money. And so I,
00:19:35
Speaker
And then I realized that the bank that I bank with doesn't actually have a branch. And so then I had to download a deposit form, find an envelope and a stamp to send it back. It felt very inefficient when I'm sure they could have paid it to me as a direct debit. But I guess they certainly didn't want me to get the money because it'd taken somewhat time to get the check. So that was quite an annoying and tedious task for something.
00:20:04
Speaker
which really should have just been paid direct to my bank account or refunded to our credit card, which is where it was paid from in the first place. Yeah, a check. That's just like a, screw you, here's the money. Work for it. I'm not going to ask why your bank doesn't have a branch. I'll leave that alone. What are those virtual? I'm not going to go there. Okay. And me, have you got a power tool for this week?
00:20:35
Speaker
I have a book review. I read a book by Russell Brand, the actor, comedian, activist guy called Mentors, How to Help and Be Helped. And anyone who's read Russell Brand, any of his books before, he's got a very
00:20:52
Speaker
distinctive style. He's very erudite, but he loves sort of to crack a joke. It's quite self-deprecating. It's an interesting style, but it's quite genuine and he's clearly quite raw in this book talking about formal and informal mentors that can help you through stages of life or questions in life.
00:21:14
Speaker
And I guess for me, it broadened my perspective on mentoring, which I'd always sort of thought about in a work contest and people helping you, sort of, you know, coaching you or working through skills and knowledge and working through organizational stuff. But for him, he's had mentors in all sorts of different areas of his life. And he found that, you know, they can teach things and they can demonstrate things.
00:21:36
Speaker
I thought, you know, for some people, it will be handy for them to find themselves a life admin mentor, like just find someone, you know, who's cracking on and got systems that you can learn from and ask questions to. I just made me think about other areas of my life where I thought, yeah, a mentor would be damn handy. I had like the work-life balance coach for a while there, and that was really helpful.
Season Break Announcement & Listener Call
00:22:05
Speaker
It's nearly the end of our season two. We have one more episode to record and then we're going to take a little hiatus before we come back with season three later in the year.
00:22:17
Speaker
So if people have ideas about what they'd like us to cover next season, if there's things you'd like us to go over, new territory you'd like us to strike out into, then do let us know on our Facebook page or via email at hello at lifeadminlifehacks.com.
00:22:37
Speaker
Well, I hope you enjoyed this app and we hope the hacks will help you to establish the tools you need to make tax time a breeze. So consider finding yourself an accountant if you don't already have one to help you with your tax return. Consider making an appointment to give yourself a deadline or scheduling some time in your calendar.
Episode Wrap-up: Get Organized & Join Us
00:22:55
Speaker
and set up your filing systems to make it easy to save relevant documents as you go and hopefully get motivated to tax return done before the deadline. If you'd like to join us on our life admin journey, please head to our Facebook page, life admin life hacks to follow us and share your thoughts on what we're doing and feel free to post any comments or certainly post suggestions that we might be able to use. We hope to see you there.
00:23:22
Speaker
Thanks for listening. Show notes for this episode are available at lifeadminlifehacks.com. If you're a fan, please subscribe and share the love and tell a friend or review us in your podcasting app.