License article

Online tax drive

Those with uncomplicated finances are being urged to lodge returns via computer.

It's that time of year when Australians start grumbling about giving up a Sunday to fill in their annual income tax return. And for the first time they will be doing it without the benefit of the 200-page house brick formerly known as TaxPack.

It is all part of a concerted effort by the Australian Taxation Office to encourage people with simple tax affairs to go online and file their return using e-tax. About one in five individual taxpayers, or 2.6 million people, used e-tax last year and the numbers are expected to grow steadily.

A printed guide will still be available but in a shortened form.

Taxpayers who need more technical information will have to go to the ATO website ( or seek professional advice (see box, right).

The main benefit of e-tax is that it is free, with most refunds issued within 12 days. Judging by posts in online chatrooms, most are landing in bank accounts sooner than that.

''If you've got a simple return, I think e-tax works quite well,'' Roger Timms of Taxpayers Australia says.


''There are a lot of instructional features that make it user-friendly.''

A recent survey by H&R Block found the average time taken to complete a tax return was about three hours.

Given that the average tax benefit from deductions was $897 in 2009-10, according to ATO figures, that's not a bad return on your time.

E-tax includes built-in checks and calculators, and a pre-fill option that automatically downloads information held by the ATO from other organisations. This may include salary income, private health insurance, Centrelink benefits, bank interest, share dividends, and property and share disposals. But Timms warns people to check that the information downloaded is up to date and complete, because there is often a time lag before organisations report to the ATO.

While 700,000 people still lodge a paper return, the ATO estimates that only 10 per cent of those are unable to lodge electronically due to lack of computer access or computer skills.

If you are one of the estimated 10 per cent of computer users with an Apple Mac, or you rely on a tablet, then you can't access e-tax, which is compatible only with the Windows operating system. Despite protests from Mac users, the ATO has put the issue in the too-hard basket.

And despite the increasing acceptance of e-tax, DIY is not for everyone. More than 70 per cent of taxpayers still use a tax agent to lodge their return.

If your financial affairs are more complex or you simply can't be bothered with the paperwork, you may decide to err on the side of caution and pay to see a tax agent. ''Ask how sure you are that you are going to get it right,'' Timms says. ''If in doubt, go to a tax agent.''

The cost of advice

Accountants' fees to prepare and lodge an individual tax return depend on the complexity of the job, with costs ranging from under $100 to many thousands of dollars. Just don't expect the accounting profession to offer fee guidelines.

The only way to find out who charges what is to ring around.

''Treat it like you would a tradesperson and ring three or four accountants for a quote,'' CPA Australia business policy adviser Gavan Ord says. He says the quote you choose should not necessarily be the cheapest one.

''Make sure an accountant has particular knowledge of your industry, especially if you run a small business,'' he says.

''And be wary of people who charge a low fee in the first year and rack it up in the second and subsequent years.''

Fees are more upfront at suburban shopfront tax agents such as H&R Block, the largest lodger of tax returns in Australia, and ITP. H&R Block's fees start at $49 for a simplified online tax return that has been whittled down to 30-40 questions you complete yourself. ''It is more intuitive than e-tax and is aimed at people who know what they are doing,'' the group's regional director, Frank Brass, says.

If you want your return completed by one of H&R Block's tax agents, fees start at $116 - more if you have a rental property, a motor vehicle claim or other complex items. Brass says the average charge is $128. Those under 21 receive a discount rate of $70 but exclusions apply.

''Before you agree to anything, negotiate a fee, and if you are not happy, don't proceed,'' Roger Timms of Taxpayers Australia says.