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Jun 22, 2019 0

How Bookkeeping Plays an Important Role in Filing Tax Return?

Meaning

Book-Keeping refers to maintaining systematic records of all the financial transactions of the organization. It is a continuous process of recording information about the business on a daily basis. The main motive of bookkeeping is ensuring the complete record of activities which is correct and up to date.

The Core Process

The process of bookkeeping starts from the recording of the transaction of monetary purposes, these recorded transactions are then classified in respective accounts and the process is called classification. A final balance sheet and summarised profit and loss account are prepared at the end of the year by further summarising these accounts into trial balance. The true profit or loss of the business can be ascertained from these balances only.

While filing a tax return, the above-mentioned profit is first mentioned then only further deductions or additions can be made. Your tax return prepare needs all the above accounts to file your tax assessment of the year. You can hire someone professional to help you in filing tax return Sydney along with bookkeeping services.

Management of Expenses

By keeping an accurate book-keeping system, you can have a close look at your expenses. At the time of filing the tax return, you will be having properly managed funds for payment of taxes. It is your duty to have a close look on bank statements every week, it hardly takes more than 10 minutes, it serves both the purpose well.

Abiding the Rules and Regulations

There are some specific rules and regulations to be followed in book-keeping. There GAAP i.e. Generally Accepted Accounting Principles. To maintain the uniformity of the accounts maintained, these rules are followed by accountants all over the world.

  • Loan instalments: bookkeeping is done regularly and hence loan repayments and instalments are paid on time. It saves the organisation from unnecessary penalties and fines for delayed payments.
  • Double-Entry System: Each item is recorded has a dual effect on the accounting system.
  • Foreign Transactions: Foreign exchange rates fluctuate on a regular basis, a bookkeeper keeps a check on these rates to record the transaction with the accurate amount and on a specific period only.

For Assessment

Income tax return of an individual is self-assessed tax returns i.e. the particulars submitted by you are true are self-verified only. Bookkeeping plays the role of a support system in such an assessment. If the accounts or books are kept in a good and accurate manner the accounts made by them will stand true and accurate. Further modifications in the profit earned by you are calculated on the basis of particulars of these accounts only.

For an Audit

It is required by law that you should maintain a record of all your incomes and expenses of the profit and loss claimed by you in the tax return. If an audit is demanded, you have to present the description of all the transaction completed by you. You can hire someone professional to help you in filing tax return Sydney along with bookkeeping services.

Conclusion

Filing a tax return Sydney is a complete process from bookkeeping and accounting to assessment. If you choose to have services from any service provider you can definitely have some peace of mind for your own. They are professional people and knows their job well.

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