Tax time can be stressful for anyone, especially for those of whom have never lodged a return before.
It’s even harder if you have a small business, multiple incomes, an investment property or just a pile of receipts you’d rather not deal with.
But even if your tax seems relatively simple, the question of whether to get an accountant to help might have crossed you mind. It is a good idea to assess your needs for an accountant each and every year.
Some years your tax situation may be straightforward, and you feel confident to do it yourself. Other years you may need the help of a professional.
So how do you decide which course of action will give
you the best result?
First Time Return
If you are doing your tax for the first time, it’s likely to be pretty simple (provided it’s your first time paying tax because it’s your first time earning taxable income, not because you’ve avoided it for 20 years).
Doing your taxes is often portrayed as a very challenging — and potentially scary — thing, so it is understandable that a young person may feel overwhelmed. However, If you only have one income, minimal items to claims and good record keeping, lodging a tax return through MyTax is relatively straightforward.
The ATO has a lot of data it prefills into your return. It will have information like your employer salary, tax withheld and accrued interest. It will just be a matter of checking it’s right, because it is still your responsibility. Deductions, however, won’t show. So you’ll need to keep track during the year and keep necessary receipts too.
If you are feeling nervous or overwhelmed, going through an accountant might help alleviate some of this worry. Just be sure to ask lots of questions to ensure you’re learning about the process, which could help you to feel more confident in doing your own returns in the future.
How Do You Earn Your Income?
Do you have multiple jobs and “side hustles” or do you have a regular Mon-Fri, 9-5? Depending on how complex your income stream is, you could benefit from using an accountant to ensure your compliance and maximise your tax refund. Taxation can become more complicated if you’re working for yourself or employed as an independent contractor. The claims you can make on your return also differ by industry.
Small business, rental properties, capital gains can all be difficult to get right when lodging a return. If you own or run a business, an accountant can help you keep the necessary financial records required by law.
Do You Know What You’re Entitled to Claim?
You’ve kept your receipts, but do you know what you can rightfully claim?
Common deductions include work-related expenses, self-education expenses, charitable donations and the cost of managing your tax affairs (including paying an accountant).
You can find out more about deductions in our resources on claimable deductions by profession.
If you’re not feeling confident, seeing an accountant can ensure you stay within the law, and help maximise your claims.
Amendments and Late Returns
If you’ve made a mistake on a past tax return, you can request an amendment through myTax yourself.
But if you’re unsure about whether you should be making an amendment or what impact it might have, an accountant would be a good idea.
Furthermore, if you’re running out of time to lodge, using an accountant can buy you a little extra time, as accountants have longer to lodge your return that you do.
The standard due date for individual returns is 31 October, but if you use a tax agent, it could be as late as 15 May of the following year.
If you go the route of using an accountant or tax agent, be wary of too good to be true prices. Cheap options such as the $99 shopping centre tax returns often just use the prefilled information from the ATO to complete your return, meaning that you’d be better off doing it yourself. However, if you believe you have significant claims to submit in your return, seeking a good tax agent can end up saving you money by way of a bigger tax return. When finding an accountant or tax agent, don’t be afraid to shop around to find someone you like, especially if you’re looking for a long term accountant. Also, make sure that whoever you choose is a licensed agent (registered TPB tax agent) and check their reviews!