If you receive income as an employee, a sole trader or an employer in Australia, you must prepare and lodge a tax return with the Australian Taxation Office (ATO). You are obliged to lodge a tax return regardless of your residency status. For example, you are in Australia on a:
- Working Holiday visa (subclass 417),
- Work and Holiday visa (subclass 462),
- Temporary Work (Skilled) visa (subclass 457),
- Skilled Independent visa (subclass 189),
- Business Innovation and Investment (Provisional) visa (subclass 188),
- Live & work as an Australian permanent resident/citizen.
After the lodgement of your tax return, you may receive money back from tax withheld on your behalf or required to pay additional tax for income that were not withheld during that financial year. A tax return should be completed between 1 July to 31 October each year.
Penalties may incur if you fail to lodge your tax return on time. Hence, we work closely with our clients to ensure they are one step ahead when it comes time to lodge their tax return.
There are two options for lodging your tax return:
- DIY: Do it online or complete a paper tax return form.
- Hire a registered tax agent / accountant.
DIY is a great way to prepare and lodge your tax return if your income is relatively straight forward. It is mostly suited to people with little or no additional income from other sources such as shares, investment properties, businesses etc.
Some people who are more financially savvy and have an in-depth understanding of the Australian taxation system also favour the DIY approach.
The main benefit of lodging your own tax return especially if you do it online is that you can lodge it anytime and anywhere at your convenience. However, the result and accuracy of the tax return completely falls on your shoulders.
The best-case scenario for DIY is that you have done everything perfectly and get money back from your tax withheld (or pay the required additional tax on untaxed income). The worst-case scenario for DIY is that you file your tax return inaccurately which results in you either paying more tax than required or penalised by the ATO for making illegitimate tax claims. Tax avoidance/evasion in Australia is a serious crime with varying consequences including penalties, criminal convictions, fines and even prison sentences. This is clearly outlined in the ATO website.
Hiring a registered tax agent / accountant is particularly helpful in correctly claiming investment and/or business-related expenses. Whether you choose to DIY or hire professional help, proper record keeping and documentation will save you both in time and money when it comes time to lodging your tax return.
If you are considering or currently using complex tax structure/s such as Companies, Partnerships, Self-Managed Superannuation Funds (SMSFs) and/or Trusts; we highly recommend hiring a professional to assist with your tax return. C Advisory is a registered tax accountant specialised in setting up complex structures, and preparing & lodging complex tax returns.
If you are still unsure whether to DIY or hire professional help, give us a call today for a frank discussion in confidence.
Tax return reflects your activities in a financial year whilst tax planning is about being proactive and taking control of your activities. Our integrated approach has already helped many clients take charge of their accounting and taxation matters, why not you?