It’s almost time to complete your tax return for a nice refund, as well as prepare to maximise your claim for the current financial year. As Australians, we take pride in doing things ourselves. But what if doing it yourself meant you potentially miss out on thousands of dollars? Is it worth engaging a tax accountant to get you a larger refund? Here we discuss how working with a professional tax accountant could benefit you.
For starters, unless you’re a tax expert, it is unlikely you know everything you’re eligible to claim. Many occupations have specific items which are tax-deductible, as do some investment options such as investment properties. In fact, you can even claim your handbag if it is used for work.
A tax account lives and breathes tax. It’s their job to know exactly what you can and can’t claim, as well as get you the best return possible. Much like you’d see a mechanic to service your car, or a medical specialist for a health issue, a tax accountant is an expert in tax. It’s in their best interest to help you get as much back as possible.
A good accountant will take the time to understand your employment, business and investments to identify claimable expenses. While not every expense can be claimed as a tax deduction and some may only be $10 here and $200 there, everything adds up. Using a tax accountant to find the expenses you might not be aware of means you could end up with thousands back in your pocket.
The last thing anyone wants is the worry and administration of being subject to an audit by the ATO. But if you lodge your tax return yourself, you take full responsibility. Even if you make an innocent or small mistake, if you are audited you will be faced with paying fines, interest or other penalties.
Not only could a tax accountant get you a larger refund, but they may also help you sleep too. If you’ve ever been audited, you’ll know how stressful it can be. By using a professional tax accountant, you’ll have the peace of mind of knowing your return has been accurately prepared in compliance with tax laws.
Using an accountant also extends your lodgement deadline, which may help your cashflow. The deadline for self-lodging individual to submit their tax return is 31 October. But if you use an accountant, most people have up to 15 May to lodge their return.
Having outstanding tax returns that are overdue can also lead to failure to lodge on time penalties from the ATO. The standard penalty is $222 for every 28 day period or part thereof that the return is outstanding. The ATO may issue a formal default assessment warning letter, which will likely make you worse off as it will not include most of the deductions you’re entitled to.
Reduce future tax liability
A good tax accountant will help you get a larger refund now and provide you with strategic tax advice to minimise the tax you pay in the future.
Over the course of your career you’ll earn millions of dollars. You’ll also likely pay millions of dollars in tax. You work hard for your money, so it makes sense to put strategies in place to make the most of it. It could be as simple as putting more into super, or as complex as reorganising your business structures. Either way, a solid plan could save you hundreds of thousands in future tax dollars.
Look for an accountant who really invests the time to get to know you, your business and what you want out of life in the future. Someone who takes a holistic approach to all facets of your life and presents creative, out of the box solutions to give you a financial edge. As you develop a relationship with your accountant, their understanding of your current circumstances will improve and so should your return. They will also be able to give you advice should you wish to make any changes to your circumstances. For example, moving from full-time permanent employment to contract work, or changing your business structure from sole trader to operating as a business.