Today, I had finalized a tax return for a client, and had got him back in excess of $4,000, and had also helped him to remove the Medicare Levy. Normally one would be quite happy with that result, however, in this particular situation, the client napped and said he wants more, and before I had time to explain to him, he just took off, and then put a negative review on the google expressing his frustration.
I will share his post in this article and also trying to share with you how the tax return system actually work.
Unhappy tax client want more tax refund than what he actually should get
Tax return system in Australia is based on PAYG or withheld system in which your employer will withheld tax amount in accordance to the relevant tax bracket.
At the end of the financial year, when we are helping you to prepare the end of year tax return, it is our job to maximize the work related deduction for you.
But obviously deductions are only deductible if you have maintained the valid evidences and it is work related.
A good responsible tax agent will use their professional judgments to determine whether the deductions are the high end or not. If they are on the high end, they will normally advice the client of the issues.
In this particular instance, I had noticed the deductions in which the client wanted to claim are on the high end, and I informed him the importance of maintaining the proper invoice records.
At the end of day I need to be responsible to all of my clients.
I am a specialist in tax audit, and know the full consequence if the client gets audited by ATO, and if ATO finds out systematic error in the firm, then all other clients in that firm might face the possibility of being investigated as well. Normally I will also advised the client of the 5 years rule in which you need to keep the invoices, and the car expenses using cents per km.
But at the end of day, the tax refund is determined base on the tax on the adjusted taxable income after the work related deduction, if it is less than the PAYG or withheld tax, you will get the refund, if not then you need to pay the tax.
For example, income of $50,000 supposed to have a tax of $7,797, and your employer had withheld say $4,000, however, if you are able to have $5000 work related deduction, then the new adjusted taxable income of 45,000 will have tax of $6,172, hence the difference of the tax withheld of $4,000 and the actual tax of $6,172 will mean you have to pay ATO the difference of $2,172, however, if your employer has withheld say $8,000 then you will get a refund of $1,828.00.
Our firm has a maximize tax refund guarantee, if you are able to bring me written evidence that other tax agent can get you more refund than ours using the exactly the same data as you had provided to me, we are willing to refund the fee plus give you another $100 as reward to you, please give me a call on 0410-829-900.
Is travel expense deductible
I had also advised the particular client of the Medicare exemption and ways to get rid of the Medicare levy, really hope that he will tell his newly appointed tax agent of the issue, and they know how to handle the exemption process correctly, as if it done wrong, it will attract penalty from the ATO.
If you have any questions in relation to your tax return, please feel free to give us a call on 0410-829-900.