Get Ready for Tax Time... in April?

April 23, 2012, 5:07 pm Armando Camacho Yahoo!7

"What? You want me to start thinking about tax time in April? We only just had Easter!"

Get Ready for Tax Time... in April?

That's precisely the reason. Once the Easter chocolate-rush is over, the advertisers will set out to focus you on Mother's Day; that'll come and go and, before you know it, it's end of financial year and you'll go into stress mode as you scramble to get everything pulled together for your accountant.

Why not start getting organised for tax time now? If you put yourself into "tax-preparation mode" nice and early this year, how do you think that's going to affect the way you feel on June 30?

Imagine kicking back in early July with your refund already in hand (Yes, the early bird will beat the rush at the ATO), while all the procrastinators out there are still scrambling to dig up old receipts and finish their stocktake, asset review, debt write offs and superannuation shuffles.

So, with time to spare between now and June, is this the year to get caught up, straightened out, and financially organised once and for all?

Here are a few tips to enable you to grab a head start on the process, well before year's-end.

Begin by getting your files organized. I'll recommend a five-step process, which I call the "5C System":

1. Clean: Get rid of outdated information, files, records, etc. If you have any doubts about the need to keep something, store it off site or out of sight. Just the physical act of de-cluttering your working area will give you a lift in both productivity and energy.

2. Chart: Map out your (new) record keeping system for tax documents and data.

3. Checklist: Compile a list of every single item you will need, allocate a time to its preparation or location, assign a person as responsible for its assembly, then work your way down the checklist until it's all done.

4. Classify: File each item in its appropriate place according to your Chart. Create separate folders (they're cheap) for each class of information, report, document, etc, and label each folder clearly (remember, someone else is going to have to go through this to come up with an accurate tax figure for you, so put them in an excellent mood by making everything easy to find!)

5. Contract: Hire out what you can't do or don't want to do (we're all the same in that the things we don't want to do take us two to ten times longer than they would take a paid professional who has the skill, the knowledge, and the motivation!)

Armando Camacho is Managing Director of www.essentialbusinessprofits.com/