Question: I've decided to hire a tax agent to prepare my tax return. How do I look for one? And what factors do I need to be concerned about when hiring a tax agent? After all, I will be providing this individual my financial information.
Answer: While there are probably a few dodgy tax agents, most are trustworthy, law-abiding professionals. Here's a guide on how to find the right tax agent for you.
What are tax agents?
According to the Tax Practitioners Board, tax agents are professionals who provide services on advising taxpayers regarding their liabilities or entitlements under taxation law. These services include (but are not limited to) the following:
• Preparing tax returns, statements, applications, and various other documents concerning taxpayer liabilities that fall under tax law.
• Filing tax returns, statements, applications, and various other documents concerning taxpayer liabilities that fall under tax law.
• Help clients out with their tax concessions for expenses related to research and development where the service involves the application of tax laws.
How to find a tax agent
This part is pretty straightforward: the easiest way is to visit our directory of registered tax agents at TaxRefunds.com.au. From here, you can further refine results by pressing the Filter button and selecting your location.
You may also get referrals from friends, co-workers, contacts in a local club or trade organisation, social media mates, and several other trusted connections you may have. Bear in mind that your search doesn't end when you already have a name--this is merely the start of your selection process.
Vetting the agent
So now you have a line-up of names and numbers. Here's what you need to do to narrow your shortlist of potential tax agents to hire:
Step #1: Do a background check
The tax agent may be in our directory of registered tax agents, but this doesn't mean you should skip performing due diligence. The best way to start is to visit the Tax Practitioners Board Register to find out if a prospective tax agent is registered or not. Tax professionals usually include tax agents, BAS agents, and tax financial advisers.
Remember: being registered is not an assurance that the tax agent is trustworthy. Thus, if you still have some doubt, you can inquire at the Australian Competition and Consumer Commission about the agent--specifically if there are any complaints against them.
If you want financial guidance, check if the tax agent has an Australian Financial Services licence. Don't forget to ask if the tax agent is part of a trade organisation as well.
If the prospect is a member, you can contact the group to verify the affiliation.
Step #2: Interview your prospect
After eliminating the dubious candidates, you're left with the qualified professionals. The next step involves interviewing each. Consider asking them the following:
• What are your credentials?
• How long have you been doing this?
• What sort of clients do you offer your services to?
• Would you please give me some names (and contact information) of past clients?
• How long is your turnaround time for work?
• How frequently do you keep clients updated?
• How long do you normally take to return calls or reply to emails?
• Can I contact you after the due date?
• Do you use the X accounting software that I use?
• What financial documents do you need me to provide you?
• What are your rates? How do you calculate your fees?
• What other services do you provide?
Remember to take notes while interviewing your candidates.
Step #3: Check the references
If you took the time to ask the names and confirmation of past clients, then you will be able to perform this next step. As with any effort to hire a professional, it's a good practice to ask them for references.
This practice allows you to find out more about your prospective tax agents. Are they approachable? What's their personality like? Do they reply to messages? Are they prompt with their work? Were there any shenanigans when the previous customer hired the tax agent? Did they commit any mistakes in the tax return?
Don't take this step for granted; the information you gather here would significantly help you make your decision.
Step #4: Choose the best fit
Once you have everything you need to know about each tax agent, it's time to choose which prospect is the best fit for you. While it's necessary to take experience and credentials into account, make sure you also be concerned about how well their personality fits.
If you want timely updates, for instance, cross out the ones that are known to take their time before replying. Likewise, you should consider their specialisation: an agent who specialises in preparing tax returns for large corporations may be good at what they do, but someone who devotes more time servicing individual taxpayers like you would probably be a better fit.
One final tip: see to it that you review all forms before signing them. Never sign a blank form. If you're not sure about something, always ask your tax agent.