Getting the services of a tax preparer to help you prepare your taxes could help you maximize your tax return while minimizing hassle during tax season.
You may not be familiar with tax deductions and claims that apply to you or what taxes you should be paying. These lapses can lead you to overpay or underpay, which could result in severe consequences. Besides ensuring that you lodge a tax return, a professional can also assist you when your finances are complicated. So make sure to choose a registered tax preparer for your tax return in Australia.
4 Kinds of Tax Professionals
The following are different professionals that you may need to work with to ensure your taxes are filed properly.
Registered Tax Agents
Registered tax agents must complete standard hours per year to research and learn tax laws and be registered to lodge tax returns.
For complex tax situations, registered tax agents are your best option because they specialize in specific areas of taxation. They can also represent you in the Australian Taxation Office (ATO) when dealing with an audit or debts.
Certified Practicing Accountants (CPAs)
CPAs passed the CPA exam and are excellent with accounting and ledgers. However, they may not be trained to tackle tax issues and cannot lodge tax returns in their own right.
Registered tax agents are the only professionals who can lodge a tax return to the ATO. Be cautious of hiring a CPA and make sure they qualify as a tax agent or work under a registered tax agent’s supervision.
There are plenty of accountants that are good with accounting and ledgers but may not be qualified to lodge tax returns for their clients.
Like CPAs, make sure the accountant you hire is either qualified as a tax agent or works under a tax agent's supervision. If your tax accountant also qualifies as a tax agent, validate their details online via the Tax Practitioner’s Board (TPB) to ensure they are registered.
Tax lawyers specialize in tax law and often practice with a master of law degree in taxation and a Juris Doctor degree. Consider getting their service when taking your case before a court or preparing a complicated business tax return.
With the nature and complexities of their task, it is crucial to find a trustworthy tax preparer backed by years of experience. Here are some tips and considerations to help you in choosing one.
1. Ask for Their Tax Agent Number
Prior to hiring a tax preparer, ask them their tax agent number and validate if their number appears on the TPB website as a registered tax agent. A company recognised by the industry is a sign of expertise.
2. Years in the Tax Business
How long have they been in the tax preparation business? Companies backed by years of experience have likely encountered numerous tax return cases. Hence, they are less likely to make errors compared to a newly established company.
3. Tax Specializations
What tax issues do they specialize in? Note that not all tax companies have the skills and knowledge to tackle different kinds of tax claims.
It can be tempting to hire the most inexpensive option when on a budget. However, there is an average fee for preparing a tax return, which is typically charged per hour. If you encounter someone that charges based on the refund’s size or claims they can get a bigger refund, it is in your best interest to steer clear and look elsewhere.
5. Never Sign a Blank Tax Return
If they want you to sign a blank tax return, this could be a sign of potential fraud. You are responsible for the information on your tax return, no matter if someone else prepared it for you. Review the content before signing and ask questions about entries you are unsure about.
6. Provide Necessary Information
Preparers will ask for your records and receipts and ask questions to determine your total income and your qualifications for expenses and deductions. Be ready to provide your records and receipt needed to prepare your return correctly.
7. They Must Lodge Electronically
The ATO requires all tax agents to lodge electronically. If they do not offer or refuse to do this procedure, it can be an indication that they are not doing the amount of work as they claim or are likely to make errors because they do not have the software to double-check and validate their work.
8. Determine Their Accessibility
Your tax preparer must be accessible all year round. You may need to contact them after filing the return, even after the due date, if questions arise.
You are legally responsible for the content and information on your tax return files, whether you will prepare it yourself or hire a tax preparer. If you choose the latter, the tips above can help you get a reliable tax preparer to help you out. If you have any doubts and suspect your return results seem too good to be true, you must double and even triple check everything prior to signing the document.