Tax time? What! Already!
Are you prepared? Need some help to get started? In this short article, I want to help you overcome some fears and possibly encourage you to take back control by addressing some common scenarios for people affected by MS and in relation to preparing income tax returns.
Tax can be very confusing and the rules change from year to year. It may be even more challenging if you are experiencing MS symptoms that cloud your thinking or increase your fatigue. If you are feeling overwhelmed it could be worth considering seeking help from a tax professional.
Australian Tax laws are complex, however, they are getting simpler. Have you noticed your bank is asking for your tax file number? This is because much of the reporting is being automated and the ATO will generally have the details of what you earned. However, they don’t have details of the investment cost (expenses) which can reduce your liability to the ATO.
Feeling overwhelmed by the process because you don’t know what costs can be deducted as an expense is common. Speak to your tax professional to ensure you are maximising your deductions and thus reducing your liability to the ATO.
It is not uncommon to feel anxious when looking at a lot of numbers and lines of data. People with MS may also develop a level of anxiety, and this is also a common thing we have observed in my practice. Don’t worry, it is normal. The ATO can also take this into account when you approach them.
If you feel anxious or if you need more time, speak to the ATO and ask them for an extension. You will find the ATO is prepared to discuss this with you.
If you feel too anxious to make the call, you may wish to ask a family member who you can authorise to speak on your behalf. If you work with a tax professional, you may seek their help. They are trained to negotiate with the ATO and can advocate on your behalf to work out a solution.
If you end up with a liability, then what is the worst thing that can happen? The ATO asks for their money, and you will be put on a payment plan. This payment plan can be negotiated by your tax agent. Some of my clients have done this, and they have been surprised the ATO has been very understanding, especially if you get supporting letters from your doctor explaining the situation and a tax agent who knows how to negotiate a good outcome.
If you feel the debt may be too high for you to repay, or the repayments are too high, then a Financial Counsellor will be a hidden gem.
This is one of the common symptoms of MS (as you know). But between doctor’s appointments, MRI’s, supporting family members and life in general things can get out of hand and remembering to do your tax return may not be first on your mind. Put a reminder in your phone that personal taxes are due on the 31st of October every year. Remind yourself in August.
Lack of record keeping
These days most transactions are recorded electronically. This is good news for you, because you may not need to go digging too hard. Most banks will allow you to download your statements for all your accounts. The trick is to highlight which needs to be included in your tax return and which does not. So here are some tips that should help you:
A. Identify your medical expenses such as surgery cost (out of pocket), medications, therapies etc from 1 July to 30 June for each year you need to lodge a return.
B. Make sure you have your group certificates from your employer (whom you work or worked for in the relevant financial year)
C. If you have an investment property, ask the agent to send you a ledger for any rent earned/ expenses incurred for the financial year.
D. If you have taken money out of super, then ask the superannuation company to provide you with information about past withdrawals.
The point here is to collect all the information you need to maximise your tax deduction.
Costs associated with paying an accountant / tax professional
As described above, most of the information you need to lodge a tax return is automated. This has reduced the cost of engaging a professional tax agent right down, to as low as $60. Look for a registered tax agent because this will give you confidence about their ability. I recommend to my clients paying a little extra for a registered tax agent who will support them with advocacy. Most tax agents will do this as part of their job should there be any liability or special circumstances.
If you feel you need assistance in lodging your tax return, and particularly if you want assistance with budgeting and negotiating debt, the hidden gem is Financial Counsellors. They can actually take charge of assisting you every step of the way. They are qualified to assist the public in negotiating all kinds of debt and helping you budget. Please visit the financial counselling website to find a financial counsellor in your area https://www.financialcounsellingaustralia.org.au/Home
This service is free to the public and you can have a phone or face to face meetings.
If you need extra support or you are still are unclear about any part of this article, you can email me and my team by sending us an email firstname.lastname@example.org
Health & Finance Integrated
Health & Finance Integrated is a Corporate Authorised Representative of Australian Unity Personal Financial Services Limited (ABN 26 098 725 145) AFSL 234459, 114 Albert Road South Melbourne VIC 3205 (AUPFS). Any advice in this document is general in nature and does not take into account the objectives, financial situation or needs of any particular person. You should obtain financial or legal advice relevant to your circumstances before making investment decisions. Neither AUPFS nor Health & Finance Integrated takes responsibility for, nor gives any endorsement or warranties in relation to any third-party information referred to herein.