With tax season upon us, are you thinking accountant or tax agent? While their titles might sound interchangeable, their roles differ significantly. Here’s a breakdown to help you pick the right professional for your business needs this tax season.
Tax Agent:
Think of a tax agent as your tax return filing champion. They possess in-depth knowledge of complex tax laws and regulations, ensuring your business complies and avoids penalties. They’ll take care of tasks such as preparing and lodging your tax return, while maximising all your deductions and offsets to legally minimise your tax burden. Additionally, they’ll handle the quarterly lodgement of BAS (Business Activity Statement) for GST-registered businesses.
Advantages of a Tax Agent:
- Cost-effective: For straightforward tax situations, tax agents may offer competitive rates compared to accountants.
- Specialisation: Many agents focus on specific industries, providing tailored advice that directly benefits your business type.
Accountant: The Financial Strategist
An accountant goes beyond just tax returns. They act as your financial advisor, providing a holistic view of your business’s financial health. Their services include ensuring your financial records and bookkeeping are accurate and up to date. They create reports that analyse your business performance and can identify areas for improvement. An accountant can also develop tax minimisation strategies throughout the year, not just at tax time, and offer guidance on budgeting, cash flow management, and financial goals.
Advantages of an Accountant:
- Long-term view: They provide ongoing financial guidance, helping you make informed business decisions based on a complete understanding of your finances.
- Proactive approach: They can help you structure your business for tax efficiency throughout the year, potentially saving you money in the long run.
The Verdict: It Depends
For simple tax returns with minimal financial complexity, a tax agent might be sufficient. However, if you require broader financial guidance and tax planning, an accountant is a better choice.
As you start to get everything together for your tax, don’t forget to talk to your accountant or tax agent about any tax offsets and schemes available to businesses. This year, the Small Business Income Tax Offset can reduce your tax bill by up to $1,000. Additionally, depending on your industry, you might qualify for other benefits like the Research and Development Tax Incentive or the Instant Asset Write-Off scheme.
