Two thirds of Aussie get it horribly wrong.
Another reputable study into the effectiveness of using DIY tax tools such as eTax has found that a large percentage of users fell well short of the tax refund owed to them due to their poor knowledge of what and how much to claim.
On the flipside, over 20% of users over claimed, and have put themselves at significant risk of audit, and repayment of up to twice the amount of the overstated claims with those surveyed owing the ATO over $800 on average.
While over 95% of DIY lodgers believe they got their tax return right, the true state of affairs is very different as almost two-thirds of all lodgements contained serious errors and illegal claims which needed to be rectified and also delayed refunds.
‘It blows my mind that Aussies on decent incomes, and paying a medium to high rates of tax who fully admit they fall well short in claiming all legal deductions and still take a crack at it to save the modest fees of a tax pro’ said Stephen Burns, CEO of Accountants Direct. ‘It’s even more surprising since Accountants fees themselves are fully tax-deductible’ he said.
‘Everything is data-matched by the ATO these days. If you earn income you need to declare it or you will be caught with 100% certainty’ said Burns. ‘This year we have had hundreds of DIY tax lodgers come back to us for help after totally screwing up their tax affairs – a figure that will only increase heading into the new year’ he said.
Why are people risking it?
The Aussie DIY mentality is well entrenched. And for some tasks it makes financial sense to do it yourself. But sometimes the numbers just don’t add up, or, it’s just too risky.
Our advice to Aussie taxpayers is clear – you will generally be better of leaving your tax to the experts come tax time. If you want to be sure that your tax return is maximised and low risk, use a registered tax agent.
Unsure if you got the best refund? Book a no obligation call with us to see if you have left anything on the table.
Stephen is the CEO of Accountants Direct and is a Professional Director, ASIC Agent, Startup Advisor & Investor & Capital Raising Specialist.
Contact Stephen or his team if you have any questions about this post or any business matter in general.