Big Mistake 1: Not Getting The Basics Right
In my book, ’10 Biggest Property Tax Mistakes Kiwis Make That Cost Thousands, And How To Avoid Them in 2024′, I talk about how mistakes in record keeping can cost you thousands.
Not maintaining proper business records can have significant financial consequences and cost you thousands, for example by leading to:
1. Loss of deductible expenses. Lost deductions for expenses that cannot be substantiated due to missing records.
2. Reduced insurance payouts. In the event of damage to a rental property, without proper records of the property’s condition and the assets within it,
you may find it difficult to substantiate claims.
3. Audit and Penalties. If an Inland Revenue (IRD) audit finds inadequate records, you may face penalties for non-compliance. Additionally, the IRD may make adverse assessments based on available information, which could be less favourable than if accurate records were provided.
Get your basics right, ensure good record keeping and for at least 7 years.
– But is it actually 7 years, or longer?
– Are bank statements sufficient on their own?
I will aim to answer the above questions tomorrow.
Tell me in the comments – How do you do your record keeping?
