By Paul Rickard

It may be just be nine days into the start of a new financial year, however one of the chores to think about at this time of year is lodging your tax return. Unfortunately, you still have to do this task as reforms to eliminate it and offer a standard refund to many taxpayers have, like the broader tax reform agenda, disappeared off the radar.

Fortunately, the Australian Tax Office (ATO) is making the process a lot easier to complete.

Surprisingly, more than 60% of Australian personal taxpayers pay for the services of an accountant or tax agent to help them lodge their tax return. Whether this is due to the complexity of the process, fears about making a mistake or a genuine belief that their accountant or tax agent provides sound advice and adds value by finding additional deductions, no one really knows. My guess is that it is a little bit of all three reasons, because the reality is that most taxpayers’ tax arrangements are pretty straightforward.

The ATO recognized these concerns some years back by launching ‘e-tax’ – an online version of the old paper tax form, with online help and pre-filled data. Now it has taken this a bit further with the introduction of ‘myTax’.

myTax

myTax is the ATO’s streamlined, device independent solution for taxpayers to lodge online. You can access it through a smartphone, tablet, laptop or PC, and also through the ATO’s App.

To simplify the process, myTax works on the 80/20 rule and only asks questions that are relevant to the taxpayer lodging the return. It automatically includes information provided by employers, banks, government agencies and other third parties. Other advantages include:

  • pre-filling of data – which means that you only need to check the information,  add your  deductions, and hit submit;
  • saves time – potentially, you may be able to complete your return within 20 minutes;
  • tax returns processed and refunds issued within 12 business days – compared to up to 50 days if lodged by paper;
  • you can track the progress of your return via the ATO app;
  • comprehensive online help;
  • notice of assessments sent electronically to your inbox; and
  • mistakes or errors are easy to fix, and you can lodge an amendment online.

If your tax affairs are a little more complicated, for example, you have a net loss on an investment property, you have capital gains or losses (other than those from a managed fund) or you have foreign income etc., then you will be directed to use the comprehensive e-tax application. Before you start using myTax, the ATO steps you through a very simple pre-lodgment questionnaire and then takes you to the correct application.

Disadvantages of myTax

Before you can use myTax or e-tax, you will need to open a myGov account. If you are a hardworking taxpayer who doesn’t access government services such as Centrelink benefits, then the thought of having a myGov account can be a turn-off up front. Another user name, another password.
Sure, with a single user name and password you can receive messages from Medicare, the ATO, CentreLink and Child Support in your myGov inbox, update your address or other details in a single transaction, and do some other fabulous things – however, hardly top of mind concerns for most taxpayers. And that name? Don’t those numbskulls in Canberra understand that many of us abhor government?

I digress.

It turns out that opening a myGov account isn’t that painful. You will need a unique email address (this can’t be shared with another person), and once you have opened your myGov account, you will then link it to the ATO. To do the latter, you will need to provide some unique pieces of data, such as the reference number of a previous notice of assessment. Once linked, you will then be right to go.

Another disadvantage of using myTax or e-tax is that you must lodge your return by 31 October. For some bizarre reason, personal taxpayers who lodge their own return are discriminated against by the ATO and are required to lodge their return earlier than clients of accountants or tax agents. The standard date for the latter is 15 December, but can often easily be extended to as late as 28 February.

And then there are the ATO’s technology challenges. The ATO took to Twitter last Friday to apologise for the poor performance of the myTax and myGov websites, which were running at a snail’s pace and conking out for many users. You would think that after the challenges the ATO had during tax time last year, it wouldn’t have been that difficult to plan for the load this year and scale the computer servers to cope.

Finally, maybe your tax agent or accountant can help you reduce the net tax you have to pay or increase your refund, so that after paying their fee, you have saved time or money. While millions of Australians will continue to use their services, my hunch is that more Australians will start to embrace tools such as myTax and do their return themselves – particularly if the ATO can gets its act together at all levels of technology.

@paulrickard17