EOFY ETF Checklist - Tips to keep you on top of tax time

As we approach the end of financial year, you may find yourself scrambling to find paperwork and searching your files for those important documents you need for tax time. So, before you lose yourself in the search, here’s a checklist to help you stay on top of your Exchange traded Fund (ETF) EOFY requirements this tax time and the next.

Tip 1: Keep it in a safe place

Do you save all your important tax documents throughout the year or do you wait for tax time to search through a year or emails and files to find what you need? Take the time to set yourself up with a system that will help you stay on top of your files. Here are 2 simple steps:

  1. Create: It can be as simple as adding a folder to your desktop. Each time an important document comes your way from buying or selling an investment, distribution statements or trade confirmations, save it in the folder.
  2. Remind: Set up a monthly or quarterly reminder. If life gets in the way and the intensions of being a great filer of documents isn’t may have slipped… set yourself a reminder to do a quick check of your files and emails and save them across to your folder.

Tip 2: Access your annual tax statement

Your annual statement will be provided by your ETF service provider. Ensure you know who your ETF provider is, and you have registered your details with them. Some providers will provide you with your annual statement automatically.

For example, at Russell Investments our ETF provider is Computershare Investor Services Pty Limited. They hold such information as quantity of securities held, tax file number and details of participation in a Dividend Reinvestment Plan (DRP).

Tip 3: Understand the ins and outs

ETFs can offer a range of tax advantages for Australian investors, however just like everyone’s individual circumstance are different, ETFs can also have different tax treatments. You need to know and understand these types of taxes and if they apply to you.

It’s important you know the income and capital gains made on your investments as well as the losses. As you approach the EOFY, you will need to know the cost, price and quantity of any investments sold. Gains and loses need to be recorded on your tax return as you can offset losses against gains.

Distributions also need to be recorded in your tax return. Distributions can become complex, you need to look at information like if they are unit trusts or ordinary shares, Australian or foreign etc.

Through the ATO, If you lodge your tax return online this information will be pre-filled with information provided by the managed investment funds and trusts. However, you must check all the pre-filled information as it may not all be included automatically by the ATO.

Tip 4: Seek and ask for advice

Lodging your tax return sometime isn’t always a straight-forward exercise. If you are in doubt about any part of your return, investments or required paperwork, seek help. Ask you accountant or seek personal tax advice.

Tip 5: Don’t wait until next tax time

Set yourself up to be prepared at tax time and not spend hours gathering and sorting through information and not knowing what your tax outcome will be. Being prepared gives you more time to assess your tax situation now and for next time. You can make more informed investment decisions in relation to your tax situation throughout the financial year if you take the time to be prepared.

Don’t wait until tax time is upon you to take ownership of your investment goals. Tax time doesn’t have to be a dreaded yearly exercise, look at it as an opportunity to take stock of where you are, where you are headed and aim for where you want to be.