Tax returns and tax laws become more complex year after year. Fewer people each year are able to file their individual returns without a little tax planning and assistance from a tax accountant.
With the potential to miss favourable deductions or make costly errors, tax advisors are becoming more commonplace, and for good reason. To put it simply, certified tax advisors are people who are specially trained in tax law who can help you navigate the maze that is the world of taxes. They will help you understand current tax law related to your reporting responsibilities, and filing and payment obligations.
It sounds simple enough, but keep in mind that there is more than one type of tax. Some of the main categories of taxation include the following: income tax, Medicare levy, goods and services tax, fringe benefits tax, PAYG withholding, and capital gains tax. Tax advisors will advise you and help you understand, based on your actions and purchases throughout the year, which taxes will affect you and what you can do to reduce the amount you will have to pay in taxes when it comes time to file them.
If you travel abroad, for example, tax planning is essential, and tax advisors can help you understand the rules related to overseas travel and your tax obligation in Australia. For example, Australia has a tax treaty with Northern Ireland and the United Kingdom. This means that, as an Australian resident, you are protected from double taxation through a tax credit if you paid taxes in the UK or Northern Ireland.
While this is just one simple example of a tax issue that many people face, not everyone is equipped to navigate through their tax returns in order to use the tax treaty to their advantage. This is what tax advisors can help you with before your trip, and it’s what tax accountants and preparers can help you with when it comes time to file your taxes.