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Tax Agent in Australia: When to Use One

Taxes are not straightforward for the majority of us. With frequent changes in taxation laws, immense attention is required to handle your own taxes. If you fail to keep up with the changes, you may attract huge penalties.

Owing to the complexities involved and lack of deep understanding of Australian tax laws, people prefer going to registered tax agents. Whether or not you need to hire a tax agent to prepare your tax return and then lodge it will depend upon certain factors.

Tax Agent in Australia

The level of complexity of tax returns, your specific circumstances and the cost of hiring a tax agent will influence your decision to hire one. There might be some instances where you would not need a tax agent and may consider doing your tax return yourself. Let’s look at those first:

You are an employee with standard deductions.

If you have kept receipts, then claiming the basic deductions should be quite straightforward. The individuals who only have a couple of things to claim, for instance, work-related items purchased or charitable donations, can do their tax returns easily.

You earn income from a single employer.

If you get your income from only one employee, the employment should not make your return much complicated.

In this case, the ATO prefills some data into your tax return since it has the necessary information like your salary, interest on tax accounts as well as tax withheld. This simplifies things even more for individuals with rather straightforward returns. However, you will still need to double-check if the information there is right or not.

Should you consider using a tax agent?

Do you wish to do your taxes easily and quickly and get a good refund without any stress? Well, in that case, you should consider getting a registered tax agent.

Do you need tax agents?

A registered tax agent will help you ensure that the tax return is correct and accurate. Tax agents will help you make sure that all the required information is included and, thus, avoid unnecessary penalties.

Here are some of the situations when you need to hire a tax agent:

You have multiple employers, or you are a sole trader.

Having multiple employers means that your income is more complex, and thus, you may need to reach out to a registered tax agent for help. A sole trader, contractor, freelancer or somebody who has multiple employers may encounter more unusual or complex tax situations.

It becomes hard to navigate through the taxation process on your own in such situations. From claiming the tax-free threshold to complying with specific tax laws, lodging tax returns can be a little challenging for most Australians.

Taking the services of a tax agent will help you maintain the needed records or your tax return. Besides this, a tax agent will also help you stay up-to-date with all the changes in tax law.

You have investments

Investments are a source of income generation, and the more income-generating activities you engage in, the more complicated lodging tax return becomes.

Income from investments like real estate and shares typically involves different tax calculations. Due to this, there may occur some errors while lodging tax returns.

tax agent for investment assets

You will require a tax agent who has the needed knowledge to handle each asset as per law.

You run or own a business.

Having your own business is already a huge responsibility in itself, and keeping the relevant financial records required by the law can be too much.

You are complaining about more complex deductions.

Deductions are not always straightforward. You may have work-related expenses to claim or household bills from working from home. You may also incur professional development costs and training fees or even expenses of using a vehicle for work.

Depending upon your personal circumstances, you may have a couple of tax-deductible expenses that are too complex for a person without the requisite knowledge of Australian tax law. So, it would be better to reach out to a registered tax agent who can handle this for you.

A big life change took place in your life recently.

Did you know that changes in your life can affect your tax obligations? Marriage, divorce or the demise of a spouse are the events that can make your taxes more complicated.

For instance, you may have received some incentives and reliefs available to married couples. Upon divorce or demise of a spouse, these incentives will cease to exist. As a result, your tax situation becomes complex. So at a time like this, it is better to go to qualified professionals like tax agents.

You do not have time to do your own tax return.

Not everybody has time to do their tax return. So, if you do not want to worry about the fast-approaching deadline, then going to a tax agent would be a good idea.

No time for taxes- use a tax agent

If you are lodging yourself, you will have to lodge your tax return by 31 October for the previous financial year. However, if you choose to use a registered tax agent, the agent will lodge your annual tax return on your behalf after this deadline (in some cases, it might be as late as 15 May of the next year).

Choosing the right tax agent

The ATO has clearly stated that the registered tax agents are the only people that can charge a fee for the services. You can choose to engage the services of a registered tax agent either online or face-to-face.

Tax agents have to be registered with the TPB or Tax Practitioners Board. You can use the TPB website to check whether a person or an agent is registered. Along with this, you can also visit this website to find a registered tax agent.

Using a registered tax agent provides an individual with consumer protection since the Tax Practitioners Board ensures:

  • the agent meets and maintains the necessary standard, qualifications and experience;
  • the agent complies with the Code of Professional Conduct.

Besides this, you also need to discuss the services they will be providing to know what you can and cannot expect.

Registered tax agent due dates for tax returns

The majority of registered tax agents in Australia have a special lodgement program. As a result, they can lodge tax returns for their clients after the usual deadline, which is 31 October.

due dates for tax returns

The due date for an individual’s tax return will depend on their personal situation and the time they engage with a tax agent. So, in this case, you would have to contact your tax agent for advice.

For those who are using a tax agent for the first time, you will have to contact them before 31 October. This will allow you to be a part of the tax agent’s lodgement program due date. You should also do the same when you use a different tax agent than the usual one.

If you are looking for a qualified professional to lodge your tax return who can also provide advice on your tax matters, reach out to Clear Tax Accountants.

Disclaimer: The information on this website is for general purposes only and should not be relied upon for making legal or other decisions. The advice provided in this article is general in nature and is not subject to the personal financial situation and needs of any individual. Clear Tax tries to keep the information accurate and up-to-date; however, you should bear in mind with changing circumstances, the accuracy and reliability of the information will not necessarily remain the same. The information is by no means a substitute for financial advice.