Preparing for tax returns can be stressful for many of you because of unfamiliarity with the tax return process. One common question that arises during tax season is: Will you get audited if you use the best tax accountant? Understanding how tax agents work and their role in tax compliance can help you get the answer to this question. In this blog post, we’ll explore the advantages of using a tax agent, including whether they help minimise the chances of an ATO audit, and how to find the best accountants in Melbourne.
What is the role of a tax agent, and why should you use one?
A tax agent is a registered expert authorised to prepare and file tax returns on behalf of customers. These professionals understand the complexities of tax laws, ensuring that your tax return meets the Australian Taxation Office (ATO) rules and regulations. Using a registered tax agent has many benefits:
- They can increase your deductions by following the laws, ensuring you pay on time and the right amount of tax.
- They help you manage deadlines and paperwork, minimising the risk of mistakes or late submissions.
- They stay up-to-date with tax law changes, ensuring your tax return is accurate and compliant with the latest tax requirements.
Does using a tax agent reduce your ATO audit risk?
Many taxpayers wonder if getting help from a tax agent reduces their chances of being audited by the ATO. The short answer is: it can help reduce the chance of being audited. The Australian Taxation Office follows a risk-based audit approach, selecting returns based on red flags, unusual claims, and errors. Tax agents are professionals and trained to deal with tax returns accurately, which means:
- Fewer chances of lodging tax returns with mistakes or unusual claims.
- Tax agents often recheck client information to ensure claims are valid.
- Using a tax agent indicates that a tax return was prepared with professionalism.
That said, the ATO can audit any tax taxpayer, irrespective of whether you have taken help from a professional tax agent or if you submitted your tax return yourself. However, returns lodged through registered tax agents are usually less likely to trigger ATO audits compared to those self-prepared with incomplete or incorrect information. Plus, you must have accurate records to support your claim for deductions, and this is where a bookkeeper for small businesses can help you prepare accurate records.
How does a Tax Agent Help During an Audit?
In case you are audited, having a registered tax agent would benefit you. They can:
- Liaise with the ATO on your behalf, managing document requests and communication.
- Provide the right advice to respond to inquiries about the audit accurately and quickly.
- Help negotiate payment arrangements or help with returns amendments if adjustments are required.
Thus, you can also opt for Melbourne accounting services to ensure that you are meeting tax requirements before lodging. Tax agents also offer support during stressful audit situations.
How to Find a Reliable Tax Agent?
When searching for a tax agent, you need to follow the steps given below:
- Ensure the tax agent is registered with the Tax Practitioners Board, which maintains codes of conduct and standards.
- Make sure to find a tax agent who specialises in your tax situation, whether small business, personal, or investment property taxation.
- Ask for recommendations from family, friends, or colleagues who have had a positive experience.
- Check online reviews and check their responsiveness and experience.
- Confirms fees upfront to avoid surprises when lodging taxes.
Choosing the right tax agent ensures your tax affairs are handled professionally and reduces potential risks.
Conclusion
Using a tax agent can help keep your tax return accurate and compliant with tax laws. Engaging Reliable Melbourne Accountants can reduce the chances of errors or red flags that might result in an ATO audit. Plus, tax agents play an important role in handling ATO audits, providing expert advice and communication with the tax authorities. If you are looking for professional assistance during tax season, choosing us will be a smart move to simplify your tax matters and reduce your stress.
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