We live in an age of self-empowerment. We can do our own banking online, book flights and hotels without a travel agent, and even apply for a home loan without a mortgage broker.
But just because you can, doesn’t mean you should. Particularly when it comes to lodging your taxes.
To use an analogy, if you had to appear in court, you’re legally allowed to represent yourself in court. But you’d be incredibly foolhardy to do that. This comparison to court appearances isn’t too far off the mark. Like the legal system, taxation is an area that requires a lot of specialist knowledge, and it changes on a regular basis.
Given how much of our hard-earned money goes towards taxes, it literally pays to have an expert on your side who can minimise our tax liabilities and maximise all of your legal entitlements.
Here are five reasons why doing your own tax return is a bad idea:
1. The ATO won’t tell you if you’re under-claiming tax deductions
- You’ll most likely hear from the ATO pretty quickly if there’s anything suspicious, unusual, or incorrect in your tax return. They use data-matching technology that compares you against other people in your occupation, industry and industry, and even against yourself in previous years. But you won’t hear a peep from them if you’re paying more taxes than the industry benchmark. At the end of the day, the ATO is there to maximise tax revenue, not your tax refund. Tax agents, on the other hand, are there to help you do your taxes correctly while ensuring you claim all of the deductions you’re legally entitled to. There’s a reason why 74% of Australians use a tax agent!
2. You’re not an expert in tax law (Unless you are, in which case ignore this.)
- Tax agents live and breathe taxation. They’re across all of the latest changes to the relevant legislation, and will be able to advise you on whether your income tax return has been correctly filled in. Moreover, you’ll be sure to avoid any penalties or audits that come about as a result of a poorly-lodged return.
3. The opportunity cost of doing it yourself is higher
- You should consider the opportunity cost of doing your taxes yourself versus getting a tax agent to do it. You may take a couple of hours to puzzle your way through the lodgement, and even then, there’s no guarantee that you got it right. A tax agent can get it done in about half an hour, typically costs less than a hundred bucks, and you can claim the tax agent fee as a tax deduction.
4. You have to file your tax return sooner
- Typically, the deadline to file your income tax return for the previous financial year is 31 October. However, if you’re filing through a tax agent, you get an extended deadline to the 15th of May.
5. It can quickly become quite complex
- If you have no tax deductions, no secondary source of income, or have any investments, then self-lodging can be a viable alternative. But the fact is that everyone’s financial circumstances are different, and there are many parts of the tax return that aren’t self-evident. Having an expert run you through your specific circumstances makes the process as painless as possible.
Skip the not-so-sweet agony of filing your own taxes and book an appointment with Colby Business Services today.
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