Should I Do My Own Tax Return?

by Don Milne

To quote the famous satirist, Dorothy Parker, “We hate doing our taxes, but we love having done our taxes.” Especially, if there’s a refund coming our way. It’s also natural to hate paying for things that you believe you can do yourself, and tax is one of those things. When you look at a simple tax return, it seems just that, simple. So, why should we pay for someone else to do it?

Well, the truth is, if you have the option of paying someone to do your taxes, it’s probably worth it for one or more of the five main reasons below.

It Will Cost You Money, But It’ll Save You Time

Unless you are a tax law guru (or tax accountant), in order to complete the best tax return, you’ll have to have an understanding of old and new tax laws… What you can or can’t claim… What you need to declare… Then, there’s the matter of finding and keeping track of all required tax documents to avoid a possible tax audit…

If you are a pay-attention-to-details person, or a math-minded numbers person, great… But, if you’re not, the money spent on a tax accountant will probably far outweigh the stress of doing your own taxes.

The More You Know You Can Claim, The Better Your Tax Return Is For You

A tax accountant is someone who spends their time studying and dealing with tax law… Getting them to help you with your tax return could greatly improve it… They will be able to discover and recommend various deductions you are eligible for, which you may have missed… Of course, you may be more than capable of doing these things yourself… But if you aren’t, you may feel more comfortable with the help of a tax professional.

When Your Situation Isn’t Black And White

If you have a simple tax situation, great… For example, you are employed and don’t have any side income, then doing your own tax return will probably be quite simple… However, there are some “tax areas” which can make things a little more complicated, and move you into a “grey area”…

It could be that your hobby has now turned into a little side home business… Perhaps you are self-employed, or if you have two jobs, you could have even operated at a loss last year… The fact is, there are some situations which will make your tax return a lot more complicated… Those are the situations where you should definitely put money towards getting the right help and advice.

You Have More Than Just An Employment Income

If you have stock shares, real estate property, or both, you should definitely consider using a tax accountant… Especially, if you need to navigate such things as Capital Gains Tax, and Negative Gearing… A tax accountant can offer you guidance on how best to navigate tax gains from your assets, or how to claim negative gearing.

Your Personal Situation Has Changed

Perhaps you got married or divorced… Or, had a child… Maybe, you lost a spouse… If anything like this has happened to you this year, you may need help determining the best filing status… Also, as your children get older, tax credits and deductions may expire… Those things are age dependent, so using someone who understands all of your options can prove to be beneficial.

The bottom line is, it’s completely up to you. It really depends on what you’re comfortable with, and how confident you are with navigating different tax issues on your own. But, in the event that you aren’t completely confident, having a trustworthy tax professional working for you can make all the difference.

Liston Newton is one of Australia’s leading Accounting and Financial Services firms @ http://listonnewton.com.au/

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