Tax returns require you to answer a lot of really specific questions accurately.
Even I sometimes struggle with my tax return, which is why I hire a tax agent. I don’t have all the answers, but he/she does. Although, some people can and do sit down and do it themselves. A tax return is really just another form to fill out, except that it’s extra long and a little bit complicated. Some people prefer to spend the time figuring it out themselves than pay for a tax agent. The ATO provides some resources for these people to help them understand their taxes. So you don’t have to have a tax agent, you get to make that choice yourself.
All tax returns contain the same stuff, no matter how they’re filed. Tax returns are used by the ATO to create a tax assessment. In other words, the ATO wants to finish their final tax count for the year past, and make sure that everyone’s square. To do that they need to know the following things from your tax return:
1. Who you are (with the help of a tax file number).
2. What you earned (by totalling up all earnings from PAYG Payment summaries and other sources).
3. How much tax you paid (by totalling PAYG Payment summaries and other records).
4. And what deductions you’re claiming (by totalling up the receipts you’ve kept for the year).
And a lot of other information too.
So what’s the best way to turn that information into a tax return?
Okay. Let’s make a table. Here are your choices. No tax agent or tax agent, and offline or online.
In category number 1, we have; no tax agent, offline! This is the tax pack. Actually, this one was phased out by the ATO. Essentially, it WAS a booklet and a form for you to fill out with paper and pen.
In category number 2, we have; offline with a tax agent.
If you want tax help from a tax agent but want to talk to a real live person and not a computer, there are tax agents all over Australia for you to use. You can look them up and go in and see them, and they can sit you down and talk you through the whole process.
In category number 3, we have; online, without a tax agent. Presenting “Mytax”!
Mytax is the ATO’s free online program. Because it’s free, you won’t receive the help of an accountant or tax agent, but you do have access to the ATO’s website which is full of fact sheets and information, as well as the ATO’s phone helpline.
It’s linked to MyGov, another government thing. MyGov is the filing system the government uses for ALL your important records. That includes tax stuff, medicare stuff, centrelink stuff, all that. It’s pretty handy to have it all in one place.
Category 4: Online Tax Agents.
So, there are online programs you can use to lodge a return. Many will charge a fee in exchange for their help, as online tax agents. Make sure you do your research and choose a site you want to use, at the rate you want to pay.
Many people choose online tax agents. They’re often simple and fast, PLUS, you get the added extra of having an accountant check over your return from cyber space. They can give you tips to maximise your return. A lot of people don’t mind paying a fee for that service.
But also remember your deadlines for your taxes. As soon as the financial year ends on July 1st, you’ll start receiving documents from employers to help you file. You have four months to get your return in – the Deadline is October 31st. That’s Halloween.
For most people, taxation is an on-going learning experience that lasts their entire lifetimes. I can teach you the basics and where to go for help, but there is only so much I can explain in one go. I can’t walk you through your tax return because they’re long and diverse - there’s too much that changes for each person. That’s why a tax agent is so useful. They’re there to help you. A good tax agent doesn’t mind taking a moment to explain the things that you don’t understand. This stuff gets confusing, and really boring. But if you hire a tax agent, you don’t have to worry. They’ll do the whole thing, they’ll do it properly, and they’ll do it with your best interests in mind.