E-tax: how to use it and what are the benefits?

Thursday July 9, 2009

Many people have different ways they like to approach tax time with some choosing a tax agent, other an accountant while others like to do it themselves. Becoming increasingly popular over recent years is the e-tax method with over 2.2 million individuals lodged their tax return using e-tax in 2008.

E-tax is a free service provided by the Australian Taxation Office that allows individuals to prepare and lodge a tax return or baby bonus claim online.

The benefits of using e-tax for a tax return include:

• Availability 24 hours a day, 7 days a week
• Free for both the lodging and preparation of the tax return and any baby bonus claims
• Can be adapted to suit your specific working situation, thereby saving you time
• Majority of refunds paid within 14 days
• Tax debts are not due before 21 November, even if lodged at 1 July
• Calculations are performed with the e-tax software
• e-tax provides an on-demand estimate of the tax refund or tax debt
• Built-in checks ensure tax returns are completed correctly
• Built in help programs which provide access to Tax Office publications, previous rulings, examples and help screens
• Finishes with a final estimate of the return or baby bonus entitlements

Many people doubt the security of the e-tax system and its online safety; however, there are strong measures in place to protect a user's financial information with all e-tax communication with the Tax Office using encryption that protects from any unauthorised access during transmission. Furthermore, e-tax software is able to be used by more than one member of a household with personal protection still ensured.

Viewing a previous year's e-tax return or lodgement will require the e-tax software from that year although new lodgements for any previous years will not be able to be made. Of course, doing an online tax lodgement means that your files will be saved on a computer so a back up file or method is also suggested.

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