Don`t leave tax planning for the current year until the end of the year. It
should be part of our daily lives. We should be doing it throughout the year
by considering the tax implications of all the things we do. There is very
little tax planning which can be done at the end of the year.
And remember, tax planning must come at the end of any transaction, not the
beginning. There is no point in buying an expensive car just to get more tax
room than you could on a cheaper car. It is far more important to consider
whether or not you can afford the bigger car and what you will do with it.
Simply put, choose an affordable lifestyle and then work out how to save
tax.
Within the limits of the law, it makes financial sense to postpone the
payment of tax as long as possible. The idea is to earn maximum interest on
the amount you owe the Receiver before paying tax. Or, if you are unlucky
enough to have to borrow to pay your taxes, the idea is to minimise the
extra interest costs.
But if you are not disciplined enough to keep enough money aside for tax
payments, rather pay your taxes than buy anything, because the consequences
of not paying taxes are heavy.
If you need advice, you can go to the Receiver of Revenue`s office or to a
tax specialist. The Receiver`s office will not charge a fee for advice. A
specialist will. But he or she will concentrate on reducing your tax
liability. One way to get the best of both worlds is to speak to the
Receiver`s office first, to make sure that you are complying with the law in
all respects. Ask how best to minimise the effects of tax. The Receiver`s
office will gladly help. Then confirm the advice with your specialist.
This way you can be sure that you are on the right side of the law and that
you are not in danger of paying a penalty for non-compliance. And you can
keep the costs of consultations to a minimum, while still ensuring you get
the advantage of good advice.
If you haven`t yet submitted your return, hurry: you don`t have much time.
But before you post it off, make a copy of the return and of any documents
you have submitted. This will help you keep a record, just in case:
* The Receiver loses the originals (this can happen); or
* There is a query about any of the information you have disclosed.
This will also help you to fill in next year`s return, because you will need
to take into account the disclosures you made this year.
If you need to communicate with the Receiver`s office, do so in writing, so
that there is a record to which you can refer if you need to.
Finally, keep letters to and from the Receiver - and all your tax
information, for that matter - in a file.