‘Supporting your clients and the integrity of the system’: tax time tips

These days, the best advice is often the simplest.

“The key message for clients remains straightforward: lodge on time, report correctly and pay on time where they can,” Challen said.

This can be mutually beneficial for clients experiencing difficulty, thereby providing accounting professionals with time to engage, figure out, and communicate options early and target the problem before it compounds.

Challen advised maintaining a practical, proactive approach, given that these days even the fundamentals can be complex.

Record keeping and substantiation, she said, particularly when it comes to apportionment, “remain some of the biggest problem areas, particularly where clients are working from home or making mixed-use claims”.

Regarding rental properties, she said: “We are still seeing errors where properties are not being reported, returns are not being lodged, or income and expenses are not being treated correctly.” 

In this vein, it is especially important to have early conversations with future home-owning clients.

And while proposed tax changes in the recently announced 2026–27 federal budget do not take effect until after this financial year, should they be passed, Challen acknowledged there are specific legal changes to keep in mind.

This includes the preclusion of income tax deduction claims for general interest charge or shortfall interest charge incurred on or after 1 July 2025, and the expansion of third-party pre-fill capabilities.

On these changes, Challen said: “Not all income is pre-filled and it’s important for practitioners to review it carefully - and, of course, clients remain responsible for checking all pre-filled information before lodgment to make sure it’s accurate and complete.”

Challen also urged practitioners to act now on family trust distributions, tax GIC remission, review elections (and consider the need to vary or revoke) and know the “‘family group’” when making distributions.

Acknowledging that clients will likely have questions, given the high-profile and ambitious reforms announced in May, it is key for practitioners to communicate what is certain and what is not yet in place.

Challen said her advice is to reinforce the need to start with what has changed, set expectations about records upfront, use the right record-keeping tools, maintain awareness of mixed-use and apportioned claims, review pre-fill carefully, encourage record-keeping throughout the year, and document advice.

One of the biggest risks for this tax time, Challen said, is misinformation. The generation of confidence and trust in the accountant-client relationship is arguably more important than ever in a world where misinformation spreads through AI-generated content and social media and affects taxpayer behaviour.

Challen also said that, unfortunately, “sometimes tax professionals are being influenced by it too”.

And separate from the dangers of incorrect information, Challen also explained the practical pressure it can create for accountants.

“Clients may come in with screenshots, social media posts or AI-generated answers that sound confident but are incomplete, outdated or just wrong - for example, referencing non-Australian law.”

“This can create pressure to claim something quickly, to match what someone else has supposedly received, or to treat a broad online statement as if it applied to their personal circumstances.”

It is in such cases that professional judgement really matters.

Accounting practitioners are well placed, Challen said, to slow the conversation down, test the claim against facts, and explain the required evidence before anything permanent is done.

Concluding her speech with some final parting words of advice, Challen reminded accountants of the importance of setting expectations early, asking targeted questions, reinforcing client responsibility, using official guidance to anchor the conversation, and documenting difficult conversations.