How do you organise all your docs for (the dreaded) Tax Time??

Hi all,

I haven't done my FY18 tax yet (I will owe money, so leaving it as long as possible!) and I've been dreading it, as I'm not very organised through the year. I work 10+ hour days and then I get home and spend 1-2 hours most nights sorting out my investment stuff, so I don't have extra time to organise my files as I go. I just wondered how everyone here organises all their files?

I have multiple properties and am currently doing 2 x subdivisions and 1 large renovation. My PMs pay all my expenses (except insurance) for all my properties, but for the subdivisions + reno I'm paying contractors myself.

I have a folder for each property on Dropbox. Usually at tax time I go through all my emails and save any invoices I've paid directly into a sub-folder within the property folder (for eg 1 Smith St > FY18 Invoices Paid).

I then also have separate folders for work expenses, car expenses etc etc.

I then give my Accountant a USB or Dropbox link to all these files.

I've sold a couple properties this FY for the first time, so I guess I need to try track down all capital works I've done, purchase costs etc and find settlement statements for each property.

Interested to know how everyone else organises themselves? Are there any tips or tricks to save time?

 

You should be keeping a spreadsheet throughout the year ideally. I do this, but sometimes get busy and fail to update it and then forget about expenses and forget to claim them.

Hope you not giving your account piles of docs for them to go through, you should be giving them summaries or they will be charging you for their time.

 

Hi Terry I definitely don't have the time or brainpower to update spreadsheets after a full day's work...

I usually do give my Accountants all the docs rather than summaries. I know it costs me more, but:
1) On some things I'm not sure what is claimable and what isn't, so would rather get them to figure it out
2) Their cost is reasonable, and my time is worth more than what they charge

 

1) basic spreadsheet (attached)
2) Specific (portable A/Z <Receipts, Tax, Warrenty, Contract, Real estate, (etc: A/Z) ) rental folder for property
3) seperate credit card for rental costs.

 

Once set up, I find doing a once a month entry into an online accounting programme (Reckon) the best. My accountant can view online anytime and then Im not scrambling at the EOFY. I keep a physical A4 ring binder with month dividers per entity (I have several entities but you may have more than one property per entity which is fine in how I operate) where I print off and have all the paid bills in a per month filing system in the folders. Everything online is coded with eg: SMITH ST ..... so it can be itemised out. I like to keep personally on top of my incomings and outgoings so pay a lot of the bills myself which might be the difference between you and I though in this respect. I order bank statements once a month and find this the easiest to reconcile so everything balances. I also hold a seperate physical property file per property for all the other things like copy of contract, lease agreements, insurance policies, settlement statement etc from lawyers, basically all the documents that aren't everyday bills. We are all different but its great to learn how others do things to get ideas. I hate paying my accountant for work that I don't need a degree in eg: like going through a shoe box if my filing isn't up to scratch.

 

For developments and new builds its quite important that you maintain a summary that includes:
- Cost with and without GST
- Invoice details etc per transaction
- ABN details
- Dates
This information is needed for possible GST, income tax, CGT, QS report, BAS and Contractor payment reporting (annually). And doesnt assume GST doesnt impact you. Its easy to plan that it wont and then you sell within 5 years of finalising the build. These records cater for these outcomes.

We provide a summary for clients as part of our developer kit (after consultation). We suggest they then use cloud storage for supporting docs. BUT if the summary is OK we often rarely refer to them. It keeps costs down too

We also have a annual summary for rentals and a CGT record keeping tool etc all in our annual tax pack (free). Its a checklist and a summary. Organisation assists to reduce missed deductions. Tracking CGT dates, amounts etc is also important.

Its more a case of poor guidance and support - and common with practices that arent property focusssed.

 

I definitely need to step up my record keeping practices. I have been putting off the tax return as I need to go through my pile of documentation - I have been trying to update my spreadsheet monthly, but it has not been particularly successful.

Some good advice so far!

Cheers,
Inertia.