By: OTA
It’s frightening to think that tax time is almost upon us again. Each tax time presents us with a dilemma –hire an expert to take care of our return or use the ATO’s free service. The new myTAX platform that the ATO has launched is undeniably an easy option to process a DIY tax return, but how effective is it?
One in three Australian’s took the non tax agent supported DIY route last year. However by taking the free option were they better off? Did they actually cheat themselves out of a bigger return? Did they make a mistake which they could not fix? Are they still trying to sort out issues with the ATO?
Just because a return was processed by the ATO it does not mean it has been given the all clear. The ATO operate on a self assessment basis so they will process the return, but if over the following months information in your return flags an issue, be prepared to receive a ‘please explain’ along with a possible amended assessment and penalties. While the ATO’s service may be free, the cost of mistakes can be costly.
Tax law is complex and it changes on a yearly basis; word-of-mouth and a bit of Internet research simply won’t allow you to understand all the intricacies that will maximise your return. That’s why you need to consider turning to a tax agent.
What is a Tax Agent?
A tax agent is a qualified accountant that has decided to focus their practice on understanding how the Australian tax system operates. In short, they are the experts on everything to do with tax. They know what you can and cannot claim as a deduction and what you need to declare in order to remain legal and compliant.
Why Should I Engage the Services of a Tax Agent?
There are a number of benefits associated with using a qualified tax agent to conduct your tax return, just some of these include:
Pays for Itself
Using a tax agent does not have to be expensive. Online tax agent services can provide all the benefits of using a tax agent for very affordable, tax deductible fees.
The cost benefit of hiring a tax agent works in three ways:
- Firstly, the service helps you receive your full refund entitlement.
- Secondly, it helps free up your valuable time.
- Thirdly, you can claim the cost of using a tax agent on your return.
So, if you’ve avoided hiring a tax agent because it’s too expensive, it’s time to think again.
Knowledge and Experience
It is important to have comfort and peace of mind when you do your tax return or have other dealings with the ATO. Using the service of a tax agent provides this comfort. Tax law is difficult. Tax agents spend enormous amounts of time learning and staying abreast of the tax legislation and any changes, including Government changes announced in the recent May budget.
You may think you have enough of an understanding to take care of things yourself, but we can almost guarantee that you’ll miss some details that will either slow down your return or decrease the amount of money your receive.
Avoid Trouble
Getting a fat tax return is fantastic. What’s even better is knowing that your taxation activities are compliant and legal. You don’t want to end up in trouble with the ATO. Trying to find loopholes and avoid paying tax is a sure fire way to get yourself and your finances in trouble. Engaging a tax agent will help ensure you receive you full refund entitlement while staying within the legal boundaries.
Time Saver and Convenience
The ability to process tax returns online have opened the door for individuals to engage the services of a tax agent without leaving the comfort of their home. A DIY-taxer with a rental property, not using the tax agent supported service, may spend over 50 hours doing their tax. Everyone’s time is precious and we can all find better things to do with our time than spend hours combing through a tax return when a supported service is only a click away.
Also DIY-taxers are also notoriously mistake prone. Tiny mistakes can cost you a lot of time, delay the entire tax process and result in drawn out dealings with the ATO.
Organise
A tax agent can provide you with advice and tips on what you need to retain for your tax and the best ways of maintaining your records. This will save you and your tax agent time and streamline your entire return process. No more hunting around for those receipts in your glove box.
Long-term Benefits
A solid relationship with a tax agent is a great thing to have on your side. When it comes to selling your house, buying a rental property, starting a business or dealing with a will a tax agent with a solid understanding of your affairs will be able to provide you with advice and support.
Tax agents are also good allies to have on hand when the auditor comes knocking. Trust us, you don’t want to be alone when they come knocking.
Don’t Stress About Deadlines
If you have a tax agent, the October 31st submission deadline doesn’t apply to you. Clients of tax agents are eligible to receive an extension with regards the due date for lodging their tax return. You no longer have to fear the end of October.
Source: Online Tax Australia
