For many Australians, filing their tax returns this year will be very different after the coronavirus swung a wrecking ball through offices, businesses and jobs.
That means many Australians will also be wondering if this is the year to engage a tax agent for help in filing their tax returns, UNSW’s School of Taxation and Business Law senior director Dr Ann Kayis-Kumar told Yahoo Finance.
She said there are some keys that indicate taxpayers should consider using an accountant or tax agent.
If you have made a major purchase or sale…
Kayis-Kumar said taxpayers may benefit from independent professional tax advice when it comes to major buying and selling decisions.
“Whether it's property, shares, [or other] things that might then give rise to a tax implication - it's always good to talk to an accountant or a registered tax agent before ideally making those sorts of calls because you might be faced with substantial capital gains tax debts as a result of a decision,” she said.
If you’re working from home…
Millions of Australians have set up offices in their kitchens, raising new tax questions around working from home deductions.
Kayis-Kumar said the ATO now has a standard working from deduction, but further questions can arise if work and personal expenses are intertwined.
“Given the complications of working from home and the likelihood of people wanting to claim deductions related to their work but which also bleed into their personal life, if you have any doubt I'd suggest going to a registered agent.”
If you’re a sole trader…
Kayis-Kumar is the founding director of the UNSW tax clinic which helps vulnerable Australians by providing free and confidential tax advice and support. She said many of its clients are small business clients who are sole traders.
“They've got an ABN, they've registered for GST – but they don't always appreciate the enormous compliance burden that that comes with,” she said.
“If you're a small business… and you do have some money for a tax agent then they can get on top of the business activity statements (BAS) piece and just take the burden off, the psychological burden and the compliance piece.”
How do I pay for a tax agent?
It’s always worth finding out how a tax agent or accountant charges when you approach them, Kayis-Kumar said.
“It might be that they'll charge the fee at the end of the engagement when you go in to sign all of the completed returns,” she said.
Or it could be an upfront fee.
“Most people will get refunds if you've got fairly uncomplicated tax affairs - if you earn a salary or a wage, you'll likely be getting a refund anyway.”
Australians can claim the costs of managing tax affairs, including engaging an agent on tax.