What is the role of a tax accountant?

For anyone considering doing their own tax return – rather than using an experienced tax accountant – the following information should help, as it outlines exactly what an experienced tax accountant and adviser can offer you.

The role of tax accountants

Australian tax laws are complex and always changing. There are two Income Tax Acts in Australia, and lodging tax returns is compulsory for most businesses and anyone who earns more than $18,200 per annum.

The average Australian pays a significant amount of tax (about 24.6 percent ), and so tax time offers the ideal opportunity to reflect how and where, you can save tax. Therefore, the role of a tax accountant involves much more than just preparing a tax return.

Preparation of tax returns

The rules for preparing tax returns vary depending on whether you are a salaried employee, a sole trader, an investor, or a business person. Also, how you conduct your business or investment adds complexity to your tax return, i.e. whether you are trading as a trust, a company, or in your own name.

Luckily, your accountant is expert at navigating these complexities to ensure your tax return is correct and complies with the relevant tax laws for each financial year. To get you started, your tax accountant will conduct an interview to assess your situation, review your bills and invoices, and identify any deductions or benefits that can be claimed.

Of course, such expert, personal attention is not available on DIY software – which often results in you paying more than tax than you should.

Planning of tax minimizations

When running a business or earning a six-figure family income, you need to proactively plan your tax affairs to minimise your tax bill. This involves much more than just maximising your deductions. Some of the things your tax accountant will review with you each year are:

Ownership structure of your investments

Your investments, such as shares and property, can be held through various structures, for example: a trust, a company or in your personal name. Each of these has a different tax outcome depending upon your personal situation and future plans. Understanding and factoring in these structures can save you a lot of tax, so it is always best to seek professional advice

Ownership structure of your business

• In a similar way to your investments, any business can be run via different ownership structures. Therefore, getting the balance right in terms of ownership structure, the nature of your business, and your personal circumstances; can save you significant dollars on your tax bill

Protection of your personal assets

• It is crucial you manage your financial affairs in such a way that you protect your most valuable assets, such as the family home, for example, from any risk of bankruptcy or personal liability. A good accountant can advise you on strategies to achieve this

Tax Planning

• There are many strategies available to save tax, and a good tax accountant can help reduce your tax bill proactively.

In conclusion

Tax accountants like Certified Practising Accountants (CPA) or Chartered Accountants (CA) undergo rigorous training, and the layman can never know as much about the complexities of tax law as they do.

Therefore, using the services of a good tax accountant makes good economic sense, especially if you:

• Own investment properties, shares or other investments
• Run a business
• Are a start up – or considering starting a business
• Earn more than $90,000 in family income
• Lack the time or energy to do your own tax returns.

In such cases, it is always best to engage the services of an expert accountant from Tax Return Perth. Not only do we make sure your company tenders the correct tax, but we also keep your tax liability to a minimum.

So, please get in touch with us now for a free, first consultation.