For many of us, tax time is a source of dread; who likes paying tax after all? But while taxes (like death!) are largely unavoidable, what IS avoidable is being stung with a nasty fine, courtesy of the ATO. To give you the best chance of avoiding a fine, we strongly suggest you engage a reputable accountant. This may be purely for tax advice, specific to your situation, or for the management of your entire tax return. Let's take a closer look below.
How Can My Accountant Help Me Avoid Fines?
Accountants who specialise in tax devote significant hours of professional time to keeping abreast of changes to the taxation system. As well as this, around tax time, they literally spend the best part of every day completing client tax returns. How does this help you avoid fines?
- Fewer errors - yes even unintended mistakes can cost you a fine! Accountants are naturally detail-oriented people and are far less likely to make careless mistakes on your tax return than are individuals who only look at tax paperwork once a year. Because accountants know the ins and outs of the tax system, they understand precisely how to fill out a tax return and, at what parts of the return people most commonly get things wrong.
- Accurate advice to help you steer clear of making a fraudulent claim. The ATO makes use of high-tech data matching technology to assess tax returns and they look particularly unkindly on individuals or businesses who set out to deliberately deceive. While accountants are not lawyers, they can certainly advise you on whether you're steering into dangerous territory tax-wise. While a good accountant will always look to save you money, they will strongly discourage you from any tax practices that could get you into trouble.
You may think well maybe you'll risk the fine? As we discussed in a previous post if you make a fraudulent or absurd claim, not only will you potentially get slugged with a fine, you might also find your future tax returns are scrutinised very, very carefully, causing you further headaches down the track.
How to Choose a Reputable Accountant
Paying an accountant can help you avoid fines as well as other issues with the ATO; however, there is one caveat to this: you need make sure you engage a legitimate, quality accountant! Otherwise you could end up in worse shape. At a minimum, your accountant should be accredited and possess recognised (and relevant) tertiary qualifications.
If in doubt about your accountant's credentials, ask to see proof of membership to one of the below professional bodies.
- Chartered Accountants Australia and New Zealand (CA)
- Institute of Public Accountants (IPA)
- Certified Practising Accountants Australia (CPA Australia)
These bodies require members to adhere to strict professional standards.
You can also confirm that your accountant is a registered tax agent by searching for their details in the Tax Practitioners Board Register.
At Hilary Wijeratne, we've been delivering friendly and personalised tax services to businesses and individuals since 1991. Contact us today to see how we can help you.