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Should you do your own tax return or hire an accountant?

Should you do your own tax return or hire an accountant?

Many people lodge tax returns themselves to save on the accountant’s fee, but recent research has found that many self-lodged tax returns from last year contained errors and by not seeking professional help, people are potentially missing out on valuable deductions and putting themselves at risk of a costly ATO audit.

  78 Henna

Regardless of whether you’re an individual, your first year in business or you have been running your own company for many years, unfortunately, very few people enjoy doing their own Income Tax Returns at the end of the year.

A question many people often find themselves asking is whether they should do their own tax return or hire an accountant to do it for them. If you really aren’t sure what is right for you, our handy guide below outlines the pros and cons of each option.

Doing your own tax return

 

Disadvantages:

Unless you are a qualified accountant or have a lot of experience dealing with accounts, chances are that you are going to have limited knowledge when it comes to completing your Income Tax Return. Trying to guess your way through it is likely to lead to mistakes, delays and a whole lot of unnecessary stress.

If you aren’t entirely sure what you are doing when completing your tax return, you may make innocent mistakes that can lead to a lot of stress. Whilst it is easy to make genuine errors that you don’t notice, if the ATO spots anything that doesn’t look right, your chances of being investigated are increased.

Benefits:

You will have complete control over your Income Tax Return how long it takes to complete and when it is done by. Business owners who like to have total control all the time sometimes prefer this option because it means that they’re not relying on someone else to do something for them.

One of the main benefits of doing your own tax return is that you will become completely aware of all your personal finances. You will know exactly what you have coming into and leaving the business and are therefore unlikely to face any surprises at the end of the tax year.

 

Hiring an accountant

 

Disadvantages:

Cost is usually what stops people from hiring an accountant to do their tax return for them. A good accountant will cost money which can be difficult when you know you are facing a tax bill shortly.

As with anything, you do of course run the risk of hiring an accountant who isn’t particularly reliable. Taking this into consideration, it’s very important to do your research before choosing an accountant and if possible, speak to someone who has used them before so you know exactly what you will be getting.

Benefits:

If you are busy running your own business, managing staff and trying to have a personal life too, chances are that you aren’t going to have time to even think about doing your tax return.  Rather than stressing and worrying about deadlines, accuracy and investigations, it’s much easier to pass this job on to a trusted accountant that will do all the hard work for you.

Accountants are well trained when it comes to spotting ways to save money. They are far more likely to know the items you can claim for and they are also going to be experts in reducing your taxes. Although you might not initially like the thought of paying an accountant to do your Income Tax Return for you, in the long run you may find that by doing so, you have actually saved yourself a lot of money.

Tax laws change all the time and therefore it can be difficult to keep up, especially if your role or industry is completely unrelated to finance and accounting. This means that in order to have complete peace of mind, as well as trying to complete your tax return, you will have to make sure that you are up to date on all the latest laws before you even start your Income Tax Return.

 

Estimates show that there could be up to $300 million in unclaimed tax across Australia’s 3.3 million self-lodging taxpayers so contact the SHB team at 78 Henna Street to maximise your tax refund.

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P.O. Box 495
78 Henna Street, Warrnambool, VIC
Phone: (03) 55 618 618
Fax: (03) 55 618 600
Website: www.shbbusiness.com.au
Email: office@shbbusiness.com.au

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