Tax time can be really painful, ending up with you turning the house upsidedown to find all the various receipts, invoices, summaries and documentation you need to complete your tax return. Such a drama!
Unless you are skilled at tax time organising.
With me moving into a sole trading position as a contracting psychologist, tax is suddenly a whole new ball game. I will essentially be self employed which is new and unfamiliar, so a big motivator to get my affairs in order. To do this, I have set up a two part tax and expenses tracking system to keep on top of my finances.
You knew I was going to say that right? Me and spreadsheets… yep, we are good friends. This one is really basic and suits my exact needs, with a section for income. Since I am contracting and my income will vary each week, potentially coming in twice or more a week, I have set it up to record each income deposit as a new entry.
And as I won’t be charged tax on my income as a sole trader, as a rough estimate, a calculation of my income minus 30% at the bottom. I still need to work out how to do a similar system for super contributions once I get my head around that.
The next page of the spreadsheet is a simple tax deduction tracker, to keep track of all my purchases, work related expenses, and professional requirements so that when tax time rolls around, it is all right there in one spot what I should be claiming.
I also have a 3rd page to suit my professional needs, tracking the date, type and number of appointments I do and location of the appointments so that I can keep track of petrol expenses and kilometres for tax time.
You can download a version below for free with the first 2 pages included:
2. Tax Binder
This part is pretty simple also and is just a normal 2 ring binder with dividers for all of my important work related documents and tax related information. Behind each tab is a different type of document, such as work contract, Medicare forms, professional registrations, etc. Then a section for invoices. Simply punch some holes in and keep them in the folder.
Then for receipts, I am using a Becky Higgins 6×12 envelope pocket to keep them all in one place. I used a hole punch to add in the extra holes as they are designed for 3 ring binders. Inside are receipts for things such as stationary purchased at the local Officeworks store, resources from Target and Kmart for example. To make it even clearer, in case I have purchased more than just work supplies on these receipts, I highlight the lines that correspond to work expenses.
So there you have it. Quick set up. Simple to maintain. And it will save you a whole lot of grief come tax time! If you do download my simple spreadsheet, I would appreciate it if you could share on Pinterest or other social media 🙂