7 Daily Hacks to Better Tax Refunds – Day 7 (Use a Pro)

By Stephen Burns, CEO Mr Tax Refund.

Use a Registered Tax Agent to Get the Best Refund

Your Professional Tax Consultant can help you in many ways. They can:

  1. Ensure all available deductions are claimed,
  2. Help you pay the least amount of tax possible,
  3. Respond to any ATO enquiries on your behalf,
  4. Take the burden out of tax preparation.

Over 70% of Australians use an ATO Registered Tax Agent to prepare and lodge their tax return. 

It takes years of study to become a Registered Tax Agent, and constant changes in tax laws mean constant ongoing training.

The added bonus about having your tax return prepared by a professional is that the bill is tax deductible, so the money you spend on a tax agent, you will receive back the following financial year.

Recently the ATO have been pushing individuals to use their free E Tax system. Our clients have reported that the process of using E Tax can be frustrating, confusing and often results in a minimal tax refund.

By seeking help from a tax consultant you can save you time and boost your tax refund. They can also help you to put a personal plan in place to reduce your tax year on year and help you build your income and assets.

Use the services of Registered Tax Agents and Advisors who have deep knowledge of tax and are up to speed on the many changes that happen year on year.

Tax professionals will often find tax deductions and offsets you are not aware of resulting in better tax refunds. They will also minimise any mistakes that could hold up your return (and your refund) or even trigger an audit. (Audits are no fun, and can be expensive!)

Want more tips? Check out out our whole Ebook here.

Your 2012 Tax Return: 6 Things to Consider When Selecting a Tax Agent.

Like most of us, you probably won’t have the time or know-how to prepare and lodge your own tax return, so it’s likely you will turn to the service of a Tax Agent.

So how do you choose which is right for you?

There are a lot of tax agent companies in Australia – over 37,000 to be exact offering all manner of tax services with different fee structures. Though self-complete tax preparation services are growing in popularity, assisted tax preparation is still the most popular method of lodgement in Australia with 71% or 8.8 million returns being lodged. More than 95% of businesses get their returns done by a Tax Agent.

Here are 6 important considerations when selecting a tax agent for your 2012 tax return:

1.      Is the Tax Agent registered?

This is perhaps the most important thing to check. Australian tax agents must be registered with the Tax Practitioners Board. Look for or request a registration number from your tax agent or check yourself at the Tax Practitioners Board website.

To achieve registration, tax agents or tax agent companies must have the up to date experience and related accounting qualifications and must be a person of good character. Additionally, only a registered tax agent may charge a fee for preparing a tax return. However, over the past few years unscrupulous unregistered so called tax agents have sprung up, charging clients to lodge returns via online portals such as etax, which is unethical and illegal.

2.      Are you paying too much?

There are no ‘set’ tax return fees. Generally, what you pay depends on your individual circumstances and who you choose as your tax agent.  Many Australian taxpayers enlist the services of accounting firms that are simply too expensive for their needs. Such firms can charge upwards of $350 an hour and many have a one hour minimum charge.  Such practices generally have high overheads they need to cover, such as expensive high street offices.

Even though the fees charged by your tax agent are tax deductable in the following year, given the average aussie has relatively simple to intermediate tax needs, one can still get the maximum refund for a reasonable fee. At the end of the day, financially, you are better off matching the tax agent to your specific needs.

Qualified experienced tax agent companies such as new innovative Australian tax agent Mr Tax Refund are becoming popular with canny consumers seeking the same service for a reduced price.

3.      Does the agent guarantee a maximum refund?

Getting a maximum tax refund is the aim of every tax payer. No one wants to pay more tax than they have to and it’s arguable that the Australian Tax Office benefits from the naivety of the Australian public by holding onto more tax than necessary.  Some tax agents will stand behind the quality of their work by guaranteeing the maximum refund and offering to repay fees should they not attain the optimal result for their clients.

4.      Does the agent offer instant refunds?

Many tax agents offer ‘quick’ tax refunds, but they are really not in control of the time it takes for the Australian Tax Office to refund the clients’ money, and often this will take several weeks at the earliest. Some Australian tax agents offer an instant tax refund option for those that need their money very quickly. For a fee, the agent or associated financier will forward all or a proportion of the clients expected refund within a day or two. This service has been popular in the US and Canada however only a very small number of Australian tax agents provide such an option.

5.      Can your agent access the tax office over the internet?

One of the key benefits of being a registered tax agent is the ability to access the Australian Taxation Office’s Tax Agent Portal on the internet. Registered tax agents can get a window into their clients’ tax profile allowing them to prepare and lodge client tax returns quickly and easily. They can also check a client’s tax history and get details on most government debts owing (which are deducted from the balance of any refund due). Access to the portal can also provide important information from employers (such as payment summaries, allowance information and employee share scheme information) and income from bank interest among other things.

6.      Were you aware your tax agent is not personally responsible for your return?

Even if your tax agent completes your return it is you who is ultimately responsible for the information it contains and even any mistakes they make which could end up in extra tax payable, audits or possibly fines. So it’s important you are accurate and honest when briefing your tax agent and providing them with your documentation.

Tax agents can however be reprimanded by the Tax Practitioners Board or even lose their licence f they submit an inordinate amount of incorrect returns.

When providing tax return documentation to your agent try to include previous tax return(s) and all your PAYG payment summaries (previously known as group certificates) from each employer that you worked for during the year. If by the end of July you have not received a PAYG payment summary, call the employer and request it as it is a legal requirement to provide employees with these by mid-July.

A registered tax agent is a good investment, but choose wisely

If you, like most aussies, are unfamiliar with tax law its highly advisable to use a registered tax agent to submit your tax return in 2012. If you shop around and choose an agent that meets your needs as closely as possible, not only will the fees paid be a good investment it will also save you a lot of frustration and anguish.