Advise on Tax Needed

[pisces27]

Hi All,

I own an Investment property which is 8 months Old worth $259k, rent return $250 Pw.
Each year I pay I'm paying 20k to 25k in Tax. My tax return after I pay the accountant fee's is about $1000. Which seems quite low to me.

Does anyone have any recommendations on how to increase to Tax Return? My income is pushing 100k. This is the 2nd accountant i've had in 3 years. No one seems to want to offer advice & the ones that do just want huge commisions.

Any advice is appreciated. I don't know all the loop holes in the Australian Tax Sysyem. So i'm relying on my accountant to get the maxium refund possible. I dont think this is happening.

Any recommendations for Accountants in the Brisbane Area?

Thanks Jai
[email protected]

 

[Jeith]

20 to 25k is correct for your income.

Is the IP negatively geared? How old is the building? Have you had a capital allowances report done for it?

At your top tax rate you are paying 39.5c in the $1, which means that for each tax deductible $1 you spend you only get 39.5c back (some exceptions to this). If you are getting a tax refund of $1k each year after the accountants fee you are probably already including a few grand of deductions.

Not too many accountants are paid on a commission basis, are you referring to financial planners? If you're only seeing your accountant once a year to lodge your tax return then there probably isn't too much they can do.

Ignore tax advice from mates in the pub.

 

[Gools]

Jai, is $259k what you paid for the place?

What are you claiming at the moment? Please dont just shop around accountants till you find the one with the highest deductions. You should know the rules you are playing by.

Things you should be claiming:
-Depreciation (Building as well as the floor coverings etc).
-Interest repayments
-Council Rates
-Water Supply Charge
-Insurance
-Property Management Fees
-Strata Fees

You should be getting a lot more than $1000 back unless you don't have much money owing on the place. If you didn't borrow the full amount then you have possibly made a mistake that will take time to rectify. Do a search for debt recycling on here to help.

Gools

 

[coastymike]

Expecting a progressive responsive accountant to help minimise your obligations and pay them peanuts. Think you got what you paid for.

 

[house sale]

How much is the accountant taking out for them?

 

[Mark Xpnsit]

It is important to build a relationship with your accountant and give them the opportunity to get to know your personal circumstances - if they see you as someone who's going to shop around for the best price they won'r bother to get to know you and your needs.

As already mentioned regardless how good your accountant is its important to know what you could expect to get back and what kind of deductions are available to you before you see your accountant.

 

[PHF]

All wise words from everyone that has commented.
Dont forget there are a lot of other variables that effect your refund, beyond the simple fact that you have a rental property.
Do you have private health cover?
Have you ever done a PAYGW variation?
so on and so on.......


Take the advice of every comment posted above. They are all very valid points. Just having a rental property doesnt necessarily mean a big refund.
Everyone that has rental properties located in the Pilbara, get tax bills each year, not refunds.

Take the time to sit down with your Accountant and discuss your whole tax return. Expect to pay for this. It will quite likely save you money in the future and prevent a bit of confusion.

 

[pisces27]

I guess educating myself on the whole tax system is a better way of going, than just relying on my accountant to sort through the paper work.

I had a statement of advice done by a financial planner, But i find it a little diffulcult to take advice from people who arn't already successful in investing and who have an income below mine. It all looks good on paper.

Thanks for the replys, I have downloaded documents from the ATO to read through.

 

[Gools]

Jai,

Do you know which ones of these you were claiming or are you unable to tell from your tax return?
-Depreciation (Building as well as the floor coverings etc).
-Interest repayments
-Council Rates
-Water Supply Charge
-Insurance
-Property Management Fees
-Strata Fees

Gools