With the start of a new financial year comes the annual task most of us have to do – lodging a tax return. A lot of us will engage the services of a professional to help ensure we complete our tax returns properly and to the law. How do you ensure you get the best tax time help available?
While it’s possible to complete your own tax return on the Australian Tax Office website, many people have more complex tax issues. With the surging popularity of ride sharing, home sharing and the 'side gig' economy, completing your tax return may be a little more complicated than it once was. Nobody wants to be in trouble with the tax office, so a competent accountant can make life a lot simpler.
How to find the right accountant for you
There are a few ways to find an accountant, whether it’s through an online search or word of mouth from family or friends. However you find an accountant, there is some due diligence that you can do to ensure they are the right fit for you:
- Firstly, your accountant should be a registered tax practitioner. Can check the Tax Practitioners Board to see if they are on the register.
- You should ask a potential accountant what qualifications they have and what professional bodies they belong to, such as Institute of Chartered Accountants, Certified Practising Accountants Australia or the Institute of Public Accountants. By belonging to a professional body, they have obligations to adhere to codes of practice.
- If you work in a niche industry or have complex tax issues, you will want an accountant who understands your industry. Ask whether they have any specialised experience that may be a good fit for you.
- Before you engage an accountant, be sure to ask about their fee structure, so there are no unexpected surprises or hidden costs.
- Ask how they work. You may want to know how they plan on communicating with you: face-to-face, email, over the phone. Ask if you will be dealing with a specific accountant in the firm or will there be a number of people assigned to you. This may help you decide if they are the right accountants for you.
How to optimise your accountant’s time
If you’re working with a new accountant, you can use your accountant’s time more efficiently by having the right documents ready for them. The best one to start with is your last tax return, this will have all the important personal details required such as tax file number, types of income and previous deductions. This will give your accountant a good head start.
Then you’ll need to provide information on all types of income you have received including PAYG summaries, bank interest, allowances, rental income, capital gains, dividends, etc. Some businesses have started using Single Touch Payroll (STP), which means they do not need to provide a payment summary as the information will be going straight to the ATO.
You’ll also need to provide details of expenses that can be used for tax deductions, such as log books, receipts, bank statements, etc. The more information you are able to provide gives your accountant a more comprehensive view of your financial situation. You should scan all these documents so you have an electronic record if you’re required to produce them again in the future or for auditing purposes.
What constitutes as negligence as an accountant?
Unfortunately, there are times when an accountant does not do their best for a client. An accountant’s negligence can have significant financial and emotional impacts on your life or business. An accountant has a duty of care to a client and they must do their job competently. If they make a mistake and a client suffers a financial loss as a result, the accountant may be liable to compensate the client for that loss.
Shine Lawyers - we're here to help
If you’ve been affected by an accountant’s negligence, Shine Lawyers’ professional negligence experts may be able to help. Contact us for confidential, no-obligation advice on whether you’re eligible to make a claim.
Written by Shine Lawyers. Last modified: January 7, 2020.