Yahoo Finance Tax 2024: Should I do my tax return myself or use a tax agent?
Tax time is fast approaching and millions of Aussies will be getting ready to submit their tax returns.
Tax time is fast approaching and Aussies around the country will soon be asking themselves the same question they ask every year: should I do my tax return myself or get a professional to do it for me? For some people, it's an easy answer, for others, it's a bit more complicated.
Doing your taxes can conjure up images of piles of receipts and endless pages of forms that you have to fill out. But finance expert Ben Nash told Yahoo Finance the Australian Taxation Office (ATO) has loads of information to help you DIY your tax return.
"I think the ATO's technology has improved year on year," he said.
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"[But] it can also miss things and then you don't get as much back in your tax return. I think if your situation is really, really simple, then that can be a fine approach."
If your situation isn't so simple, meaning you have loads of tax deductions to make, side hustle income, investment properties, or cryptocurrency earnings, then Nash said it might be easier to sit down with a tax agent.
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"I think accountants can be a good option and then you've got some extra support to actually guide you through the process of getting the most back in your tax return," he explained to Yahoo Finance.
According to ATO statistics, 13.7 million tax returns were lodged for the 2023-24 financial year and more than 8 million (58.3 per cent) were done using a tax agent
Can I go to any accountant for my tax return?
If you've decided an accountant is the right choice for you, it's not as simple as searching online for the one that's closest to your home.
"You've got to choose the right accountant if you want your tax return to be good, "Nash said. "Not all not all accountancy businesses tackle tax returns in the same way.
"For anyone considering using an accountant, it would be worthwhile for them to ask questions at the front end to really understand how is it going to work? What do I have to do? What are you going to do and what am I going to get out of it? And what does the timeline look like?"
He said it's essential that you and your tax agent are aligned with what "you're hoping to get out of the process".
There are also industry-specific accountants who can be more privy to the types of deductions typically seen in a person's job that might be missed with a general tax agent.
How much does a tax agent usually charge?
This can totally depend on how much work your tax return will take, but the typical fee is between $220 to $660 for individuals and businesses are usually charged an hourly rate.
Nash warned those individuals using traditional accountants on the cheaper end of the scale not to expect too much for their tax returns.
"The unfortunate reality is that most accountants don't really charge enough money to spend the sort of time that people would really want or hope or need to get the most back in their tax return," he said to Yahoo Finance.
"They can only spend a limited amount of time on that return before they're losing money on the work. I think most people most people don't realise that.
But, it's worth noting that your tax agent fees are tax deductible for the following financial year as well as:
Travel costs to get tax advice
Litigation costs, including court and Administrative Appeals Tribunal fees, and solicitor, barrister and other legal costs
The cost of a valuation for a deductible gift or donation of property
Some fees you incur when you pay your tax obligations by card
Costs to comply with your legal obligations for another person's (or other entity's) tax affairs.
Hybrid model worth looking into
Nash said there are websites like H&R Block and eTax that have online systems that can act as a hybrid system between doing your tax return yourself and getting a tax agent to do it all for you.
These sites allow you to input a lot of your data and it'll give you the necessary information for your return.
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