DIY Tax Returns vs Hiring a Tax Agent
It’s often said that the only two certainties are death and taxes, and most of us probably would rather avoid both! Unfortunately and regardless of how you may feel about the morality or ethics of taxation, failure to pay (or failure to lodge, FTL) can result in steep fines and penalties in Australia.
Is it worth lodging your income taxes yourself or is it better to hire an agent to do so on your behalf? There are many considerations that might affect how you go about doing it, each with advantages and disadvantages that can significantly affect how much you are expected to pay (if at all!).
Do You Need to Pay Taxes This Year?
First and foremost, you should be asking yourself if you even owe taxes in the first place. Most tax residents in Australia that are employed and earning a gross salary of $18,200 or more will need to lodge income taxes before 31 October (payment date of 21 November) when-self-lodging (extended dates apply when using a tax agent).
Ask yourself the following questions:
01. Are you a tax resident? Generally, if you primarily live in Australia, have lived here your whole life, or have spent 6 months (often called the ‘183 day rule’ in most other tax jurisdictions) in the country, then you are most likely a tax resident.
02. Are you employed? If you have earned any income from employers in the past year, they must legally deduct a proportion for tax purposes, which means you should lodge.
03. Does your income surpass the threshold? Generally, if you’ve earned at least $18,200 in the past year, you must lodge your income taxes.
There are more cases in which lodging taxes are required than not, so in most cases the safest answer is yes, you must lodge for taxes. If you’re unsure of your tax resident status in Australia, it’s better to speak with a qualified tax agent than to simply ignore lodging for the year since failure to lodge (FTL) can result in unwanted penalties.
Is it Worth Filing Taxes Yourself?
While the government claims that self-lodgement of income tax returns is easy and secure, this may not always be the case. If you do not own property (foreign or domestic), financial instruments like stocks or bonds, and generate a single revenue from an employer, your case may be more straightforward, but many individuals with more complex cases may find self-lodgement to be a challenge.
The Benefits of Hiring a Tax Agent
By choosing a reputable and qualified tax agent to handle your lodgement on your behalf, you are eliminating a big source of potential error. Errors might end up with you having to pay far more than expected, and in some cases you may be audited which can be stressful as well.
Tax agents such as Badawy Large & Powers can assist with all manner of income tax lodgements as well as advise on your tax resident status and tax deductible items in order for you to legally pay as little as possible whilst also reducing the stress and labour involved with self-lodgement.
Badawy Large & Powers
Leave business taxes and individual taxes to the friendly team of experts at Badawy Large & Powers.