Whether you’ve started your own business, decided to go freelance or maybe even started renting your property on Airbnb, it’s likely you’ll need to pay income tax.
When you work for an employer, this is all taken care of on your behalf, but the income you’ve earned through your own ventures will most likely require a tax return.
Filing a tax return can be daunting, but it doesn’t have to be as bad as you imagine. Here are some top tips for filing your first tax return to help you get through it.
Put all the key dates in your diary
Tax returns vary from country to country, and you must understand the tax rules for the country you’re filing in. If you’re filing taxes in the UK, you’ll need to consider UK self-assessment procedures, and if you’re filing taxes in Portugal, you’ll need to adhere to Portuguese self-assessment rules.
There can be some complications, such as renting a property in Portugal out while you live in the UK, so make sure you’ve researched all of the tax rules relevant to your situation. Mark all key dates in your calendar to ensure you have plenty of time to file everything you need.
Monitor your accounts throughout the year
A lot of people put off managing their accounts until the end of the year, but that can lead to a lot of stress and frustration as you try to juggle your tax return. Monitoring your accounts throughout the year can make it much easier to manage your tax return, helping you monitor exactly what’s coming in and out. Set a date each month when you go through the previous month’s accounts to help you stay current. You can use a simple spreadsheet to do this, or use specialist accounting software.
Keep track of your receipts
Managing your business expenses can be a big help when it comes to your tax return. Recording your allowable expenses will mean you could save on the overall amount of tax you pay. This could include things like travel and equipment costs, as well as other necessary business expenditure. Keep your receipts somewhere safe (take photos to make it easier), and log the amounts with the rest of your accounts.
Hire someone to help out
Filing your tax return can be overwhelming, especially when it’s your first time. One of the simplest things you can do is hire a remote bookkeeper to take care of your accounts on your behalf. They’ll be able to work out your taxes and help you manage your income and outgoings, leaving you to focus on your work. This can help ease some of the stress of filing your return, knowing it has been done by someone experienced and knowledgeable.
The good thing about tax returns is that they only need to be done once a year! And while the first one may be tricky, it will get easier. Get yourself organised, stay on top of your accounts and give yourself plenty of time to complete your tax return successfully.
