While some people prefer to do their own taxes to save money, it’s always better to get professionals like accountants or registered tax agents to do all the tax-related paperwork. Here’s a quick look at the benefits of using tax specialists or accountants, how to choose them and use their service.
How Families Benefit from Using Accountants
True, engaging the service of an accountant to manage tax affairs costs money but it is certainly money well spent. Here’s why:
- Tax laws are complex and change frequently. Accountants often attend courses and keep abreast of financial news and taxation issues. They will know how households can make the best of the latest tax laws.
- Good accountants ensure that tax returns are lodged properly and provide advice on smart financial management.
- The costs of engaging an accountant to do taxes can be claimed as tax deductions.
- Some accountants also represent their clients in disputes with the Australian Taxation Office (ATO).
How to Choose a Tax Specialist
Obviously, an accountant’s qualifications, experiences and areas of expertise are important considerations. Start by asking around. Friends, colleagues and relatives are good referral points. Websites of the Certified Practicing Accountants (CPA) Australia, the Institute of Chartered Accountants in Australia (ICAA) and the National Institute of Accountants also have search engines to help people find qualified and registered accountants throughout the country.
Once a few names have been shortlisted, call them up to make some enquiries. Ask these tax specialists about their tertiary education, qualifications and areas of expertise. Families keen on making or already have different investments can ask whether the accountant provides services to structure their investments tax effectively.
Other things to enquire include:
- The accountant’s location. It’s better for a family to find one in or near their suburb.
- How fees are charged. Many tax professionals charge standard minimum fees for annual income tax returns.
- The flexibility to make enquiries over the phone.
How to Use a Tax Professional Effectively
Good accountants are highly qualified professionals with expertise in finance, accounting and taxation. Ideally, see an accountant one or two months before the end of the financial year. Outline all possible household earnings and expenses for the year. Then based on these estimates, ask whether there are legitimate ways to reduce tax. Get his advice and expert opinions on how salary sacrifice, more repayments to mortgages and other loans, income splitting and making work-related tax rebates work best for the household.
Taxation matters can be complicated and confusing. To prevent accidentally omitting something important in their tax returns and to maximize tax reductions, families should consider using a qualified accountant or tax specialist to do their taxes. Choose only qualified and registered professionals. To use their services effectively, see them weeks before, and not after, the end of the financial year.