Hiring a Tax Accountant vs Doing Your Own Tax Return

Managing taxes is a complex process for both individuals and business owners. The choice between hiring a professional and doing it yourself is often difficult. While both options have specific benefits, the decision depends on your financial complexity and expertise. To take the right approach, you should consider consulting tax accountants who are aware of your financial needs.

What is a Tax Accountant?

A tax accountant Australia is a person who has in-depth expertise in preparing and filing tax returns for individuals, businesses, and companies. They always have to stay updated with the latest tax laws and maintain compliance with the Australian Taxation Office (ATO) regulations.

Many tax accountants are also registered with the tax agent portal, which allows them to manage client needs, lodge returns and access to essential tools. These professionals often assist you in minimising tax liabilities, identifying deductible expenses and filing accurate returns to avoid penalties.

What Does DIY Tax Return Involve?

Doing your own income tax returns basically involves using the ATO’s myTax tool via your myGov account. This process requires you to manually enter all sources of income, claim eligible deductions and ensure all information is accurate.

While this process looks simple, it can be challenging for you if you have multiple income streams and investments. This process requires substantial financial literacy, attention to detail and a clear understanding of Australian tax laws.

Pros of Hiring a Tax Accountant

Hiring a professional to manage your taxes offers several benefits. Here are some of them mentioned:

• Expert guidance on deductions and offsets: Tax accountants help to reduce your taxable amount through eligible tax deductions and offsets.
• Minimises Errors in Reporting: These professionals have in-depth knowledge of tax planning and ITR filing, which reduces the possibility of errors.
• Saves Time and Effort: Delegating complex calculations and compliance checks relieves you from reviewing multiple paperwork during tax season.
• Access to Specialised Knowledge: Most of the best tax return accountants ​provide deep industry insights for investments and property tax planning.

Cons of Hiring a Tax Accountant

While hiring a tax professional has substantial advantages, there are some potential drawbacks. Knowing about these aspects can help you manage the entire process even better.

Here are some of them discussed below:

• Cost: The charges to hire an accountant for taxes can be higher, especially for complex and business-related filings.
• May not be essential for simple returns: If your tax filings are simple, then using a tax agent might offer little added value.
• Sharing sensitive information: You will need to give them your detailed financial documents, which may increase the privacy concerns.
• Preparation is still required: Even with the assistance of a professional, you will have to collect and organise all your income, expenses and records.

Pros of Doing Your Own Tax Return

Having your tax returns allows you flexibility, savings and control over your finances. Here are the main benefits of DIY (Do It Yourself) tax returns:

• Cost-Effective Solution: Using the ATO’s myTax system via your myGov account is a simple process; once you become familiar with all functions, you will not need a paid service.
• Full control over your financial data: You don’t have to share sensitive information with a third party, which allows you to maintain your privacy.
• Faster for simple tax returns: If your income and expenses are simple to calculate, then filing your income tax can be done without any issue.

Cons of Doing Your Own Tax Return

Although filing your own tax return can be convenient, there are some potential downsides you should consider.

Here they are listed below:

• Higher risk of errors or missed deductions: Without professional insight, you are more likely to overlook deductions or misreport income. As a result, it can lead to a higher tax amount.
• Difficulties in handling complex financial situations: In case you have multiple income streams, capital gains, and rental properties, then complying with all tax rules can be challenging.
• Limited understanding of tax laws: Tax regulations shift often, and relying on outdated information can result in compliance issues. In such cases, knowing the Tax Accountant Cost can help you weigh DIY against professional help.

Which Option is Right for You?

Deciding between hiring a professional or doing it yourself depends on your financial situation and expertise.

You might consider hing a tax accountant if:

• You own a business, a rental property or multiple investments
• You are unsure about allowable deductions
• Your income or expenses have changed significantly

However, if your tax returns are simple and you are highly familiar with the ATO’s myTax system through your myGov account. In this situation, doing it yourself can be both time-efficient and cost-saving.

How Much Does a Tax Accountant Cost?

The cost of a tax accountant can vary depending on the type of return and service offered. For personal tax returns in Australia, the fee ranges from $100 to $250. However, if your returns include multiple business income, rental properties or investments, then these charges can go upwards of $300 to $600.

Some of the best tax accountant Perth offers packages tailored for individuals and businesses. If you operate a high turnover business, then this cost may also include tax planning and BAS services.

In such situations, seeking assistance from business tax accountants can help you to file accurate quarterly and annual tax returns. This process not only saves time but also reduces tax liability in the long term.

Conclusion

Choosing between hiring a tax accountant or filing tax returns on your own comes down to your situation and knowledge of managing financial documents. Whether you prefer to take control of your taxes or rely on professional support, make sure the method you choose ensures accuracy and compliance. If you are seeking expert guidance, then consulting a certified tax accountant Australia​ can help you with accurate tax reporting.

FAQs

1. When is it better to hire a tax accountant instead of doing your own tax return?

You should consider hiring a tax accountant if you own a business, have multiple income sources or investments. Complex financial situations often require expert knowledge to ensure compliance and reduce your tax liability.

2. Is doing my own tax return with myTax safe and reliable?

The myTax tool provided by the ATO has been trusted and safe to use in filing personal taxation returns. But its effectiveness depends on your understanding of tax laws.

3. Can a tax accountant help reduce the amount of tax I have to pay?

Tax accountants can help you to reduce your tax by identifying eligible deductions and applying tax offsets. For company tax return, hiring a professional ensures everything aligns with regulations.

4. What information do I need to provide to a tax accountant?

You’ll need to provide income statements, investment details, receipts for deductions, rental property records, and any other financial documentation for the financial year. Being organised helps your accountant file an accurate and timely return.

5. How long does it take a tax accountant to complete a tax return?

The time it takes depends on the complexity of your financial situation. A simple return may take a few hours, while more complex returns can take several days. For small business tax accountants, it may also depend on how organised your financial records are.