Tax time can be a stressful and confusing time for many Australians. With the ever-changing tax laws and regulations, it’s no wonder that many people are unsure whether to file their own tax return or hire an accountant.
This article will discuss the pros and cons of hiring an accountant versus doing your tax return yourself so that you can make the best decision for your individual circumstances.
What is a Tax Return, and Why is It Important?
A tax return is a formal statement you lodge with the Australian Taxation Office (ATO) that outlines your income, expenses, and tax obligations for a given financial year. It’s an essential part of the financial cycle because it helps ensure that you pay the correct amount of tax while claiming any eligible deductions or offsets.
For many, completing a tax return is straightforward if they only have a single source of income and minimal deductions. However, for individuals with more complex financial situations—such as owning an investment property, running a business, or earning income from multiple sources—the process can become complicated. In these cases, deciding whether to manage it yourself or hire an expert becomes crucial.
When to Hire an Accountant?
There are a number of reasons why you might consider hiring an accountant to help you with your tax return. Here are some of the most common reasons:
You have a complex tax situation.
If you have a complex tax situation, such as, you are self-employed, have investment income, or own rental properties, then hiring an accountant can save you time and money in the long run. An accountant can help you ensure that you are claiming all of the deductions and offsets that you are entitled to, which can save you money on your tax bill.
You don’t have the time to do your tax return yourself.
If you are busy with work or family commitments, then you may not have the time to sit down and do your tax return yourself. Hiring an accountant can take the stress out of tax time and free you up to focus on other things.
You are not confident in your ability to do your tax return correctly.
If you are not confident in your ability to do your tax return correctly, then hiring an accountant can give you peace of mind. An accountant can ensure that your tax return is filed accurately and on time, which can help you avoid penalties from the ATO.
You want to maximise your tax refund.
If you want to maximise your tax refund, then hiring an accountant can be a good option. An accountant can help you identify all of the deductions and offsets you are entitled to, which can increase the size of your refund.
How to Choose an Accountant?
If you decide to hire an accountant, it is important to choose the right one. Here are a few tips:
Make sure the accountant is registered with the Tax Practitioners Board (TPB).
The TPB is the regulator of tax practitioners in Australia. You can check if an accountant is registered on the TPB website.
Get recommendations from friends, family, or colleagues.
Ask people you trust for recommendations for a good accountant.
Interview potential accountants.
Once you have a few recommendations, interview each accountant to see if they are a good fit for you. Ask them about their experience, their fees, and how they will communicate with you.
However, hiring an accountant does come at a cost, typically ranging from $150 to several hundred dollars. Fees can vary depending on the complexity of your tax affairs, but many Australians find the expense justified by the time and stress saved.
The Benefits of Doing Your Tax Return Yourself
There are also a number of benefits to doing your tax return yourself. The most common benefits are:
It can save you money.
Hiring an accountant can be expensive. If you have a relatively simple tax situation, then you may be able to save money by doing your tax return yourself.
It can give you a better understanding of your finances.
Doing your tax return yourself can help you gain a better understanding of your income, deductions, and tax obligations.
It can be empowering.
Doing your tax return yourself can be a rewarding experience. It can give you a sense of accomplishment and control over your finances.
How to Do Your Tax Return Yourself?
If you decide to do your tax return yourself, there are a number of resources available to help you. Here are a few:
The ATO website.
The ATO website has a wealth of information on how to do your tax return yourself. There are also a number of online tools and calculators that you can use.
Tax software.
There are a number of tax software programs available that can help you to do your tax return yourself. These programs can guide you through the process step-by-step and help you to calculate your tax liability.
Tax agents.
Tax agents are registered professionals who can provide you with advice and assistance on how to do your tax return yourself.
Tax Return Tips for a Smoother Process
Gather Your Documents Early.
Whether you’re doing your tax return yourself or hiring an accountant, having all relevant documents ready—like payment summaries, receipts, and investment records—makes the process smoother.
Keep Accurate Records.
Proper documentation of work-related expenses and other deductions ensures you can claim everything you’re entitled to.
Stay Informed.
Tax laws change frequently, so staying updated helps you lodge an accurate return. Accountants are particularly helpful in this regard, as they stay current with the latest regulations.
Which Option Is Right for You?
The decision of whether to hire an accountant or do your tax return yourself is a personal one. There is no right or wrong answer. The best decision for you will depend on your individual circumstances.
If your finances are straightforward and you’re confident using the myTax platform, the DIY route is cost-effective and manageable. However, if your tax affairs are more complex or you value the expertise and peace of mind that come with professional assistance, hiring an accountant is the way to go.
Ultimately, the goal is to ensure that your tax return is accurate, maximises your deductions, and complies with ATO regulations. Whichever path you choose, remember that the key is preparation, accuracy, and understanding your financial situation.
Ready to maximise your tax return and simplify tax time? Let Infinity22 handle the complexities while you enjoy peace of mind. At Infinity22, we specialise in accounting and tax services that make managing your finances stress-free. Whether you’re a business owner, a property investor, or an individual with complex tax affairs, we’re here to provide personalised solutions tailored to your needs.
Contact us today to schedule a free consultation and discover how we can make tax time simple and rewarding.
