Tax time may be hectic, and you are not certain who to approach to get some assistance. You might hear tax accountant and tax agent, and think that these mean the same thing. Their jobs are not identical, although their work may overlap.
A tax accountant will assist you in knowing more about your finances, prepare tax data and plan. A tax agent may also assist in the preparation and filing of your tax returns as well as communicate with the Australian Taxation Office (ATO).
What Is a Tax Accountant?
A tax accountant is an accounting specialist dealing with taxation plus financial areas. Their clients could be individuals, sole traders, small and large businesses.
They are usually more than a tax return preparer. They are able to look at your financial statements, clarify tax policies and assist you to make more financial choices.
A tax accountant can assist in:
- Tax preparation of financial records.
- Identifying possible tax deductions
- Tax planning
- Business financial reporting
- GST and Business Activity Statement (BAS).
- Capital gains tax matters
- Business structure and financial planning
A tax accountant can be of use to a business owner throughout the year, not only during tax
time. They can assist you in knowing the impact of business decisions on your tax status.
Nevertheless, the fact that a person is an accountant does not grant the public the authority to offer tax agent services at a fee. In case you need to ask someone to file your tax return or offer their services as a tax agent, you must ensure that they are registered as a tax agent.
What is a Tax Agent?
A tax agent is a registered professional with the Tax Practitioners Board (TPB) to offer tax agent services.
Registered tax agents can prepare and lodge tax returns for their clients. They are also capable of communicating with the ATO on behalf of a client as well as giving advice regarding tax regulations that apply in the situation of a client.
A tax agent may be able to assist in:
- Tax filing and preparation of single tax returns.
- The preparation of business tax returns.
- Claiming eligible deductions
- Assisting with the ATO.
- Helping correct tax return errors
- Advising on the taxation requirements.
- Helping clients with some tax-related problems.
The TPB will require tax agents to meet registration requirements. This provides clients with some degree of trust that the individual is qualified in the profession.
Practically, most tax accountants are also registered tax agents. This means one
professional can offer accounting services as well as tax agent services.
Tax Accountant vs Tax Agent: Key Differences
| Area | Tax Accountant | Registered Tax Agent |
| Main focus | Accounting, finances and tax planning | Tax advice and tax compliance |
| Financial reporting | Usually yes | May offer this service |
| Tax planning | Yes | Yes |
| Lodge tax returns for clients | Only when authorised/registered to provide the service | Yes |
| Deal with the ATO for clients | Depends on their registration and service | Yes |
| TPB registration | Not every accountant is a registered tax agent | Required |
What Should You Select a Tax Accountant?
A tax accountant can be a good option or choice if you need more than just filling out a tax form.
An example is that you might have a small business, and you might require assistance in understanding the expenses, required taxes, or planning the upcoming financial year. You can also seek counsel prior to a big financial or business decision.
Tax accountants are able to give you a continuous service and maintain your financial records in order.
When Should You Choose a Tax Agent?
A registered tax agent may be a good option where your primary aim is to prepare and file your tax returns properly.
They can be particularly helpful if you have several sources of income, investment properties, shares, capital gains or business income.
A tax agent can also communicate with the ATO for you when their authority allows it. This would save time in case you are not sure what to do with a tax issue.
Final Thoughts
The primary difference between the tax accountant vs tax agent choices is limited to the services they render and their registration. A tax accountant usually offers broader accounting and financial support, while a registered tax agent is authorised to provide tax agent services such as preparing and lodging tax returns for clients. Many professionals may do both, so always ensure you verify their services and registration before settling on your choice.
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