What are the Key Dates I need to be thinking about?
31 March is typically year end for most Individuals, Companies and Trusts. This is when you will have finished your tax year. Your income tax return is due on 7 July each year.
If you are on a tax agency with an accountant you have an extension of time until 31 March the following year to file your tax return. Although you get more time, remember the longer you leave it to prepare your information the harder it can be with the passing of time to recall particular events or go back and request information required for your tax return. In general, the earlier you can get onto preparing information for your accounts the better.
You can start preparing your information from 1 April. At Shortland Chartered Accountants, they usually follow up with clients in May, once banks and financial institutions have issued their year-end summaries.
How can I help reduce my accounting costs?
Here are some of the things you can do during the year to make it as smooth as possible at year end...
Keep all your documents together. Have all your information together in one place where you can find it. Provide all the information requested in one go to your accountant where possible. Where your accountant asks for a list of items don’t drip feed it. This can add time and risk that information is missed causing delays and potential additional costs.
Use a separate bank account for your property. Make sure all rent and related payments go into that account.
Respond quickly when your accountant asks questions. The fast replies will help contain cost. Where cost can sometimes be added is when you leave preparation late into the year. You may not remember what a repairs and maintenance cost related to from many months previous or be able to obtain copies of receipts from a contractor so easily.
Meet with your accountant at least once a year. You should have a close working relationship with your accountant. Your accountant should understand your situation, goals, and what’s going on with your properties to ensure sound insightful advice.
Main tips when providing information to your accountant
- Request a checklist from your Accountant of the things needed.
- If you have a Company or Trust, you’ll need a Profit & Loss Statement and a Balance Sheet prepared. Your accountant should be checking that the full accounts are correct and reconciled.
- Keep copies of settlement statements for your properties.
- If you refinance loans, remember, to request copies of the loan statements through to repayment and closure. It can be a difficult and time consuming process obtaining this information at a later date after the accounts are closed.
- If you use a property manager, make sure you request a year-end rental statement which summarises gross annual income and deductions for net rent paid.
- Keep your notes succinct. For example, your accountant doesn’t need a full play-by-play notation of each repair, just the key facts to assess accounting treatment and deductibility.
- Summarise major events from the year. A brief outline can help your accountant understand your situation.
- LTC or Trust – If preparing financial accounts for a look through company (LTC) or Trust, personal tax returns are usually also prepared.
- Reply promptly to questions and enquiries. This will help your accountant complete your tax returns most efficiently.
We’ll be sharing more valuable insights from Shortland Chartered Accountants in our next article — including what expenses you can claim, how chattel valuations work, and key updates on the Brightline test and ring-fencing rules.
In the meantime, if you need help with your tax return or have a question about accounting or property tax, book a free consultation with Shortland Chartered Accountants here.
This article is for general information only. You should always seek personalised, professional advice before acting on any of the material.
