Cost of managing tax affairs - what about my time?

[DavidMc]

In regards to the cost of managing tax affairs, in the past I have just used my accountant fees.

As the time it takes to meet government tax compliance increases more and more each year, this year I had to take two days off to gather all the data and do all the ringing around, calculations and Excel spread sheeting to do my return. As an IT contractor this cost me two days not earning my regular income to do this.

My accountant tells me I cannot claim my time (or opportunity cost).

What do people think about this?

 

[Jamie M]

What do people think about this?

It's true. That's why I handed over all my finance stuff to an awesome bookkeeper. I do a bit of revenue forecasting, etc for the business - but in terms of working out BAS, etc I'd rather spend that time doing things I enjoy

As for end of year accounting - I hand ALL of that over to my accountant. I just sign and pay.

Cheers

Jamie

 

[Terry_w]

You cannot contract with yourself. Mutuality.

Even if you could the amount you claim would be income which is taxable so it would cancel out any benefit.

 

[Paul@PFI]

In regards to the cost of managing tax affairs, in the past I have just used my accountant fees.

As the time it takes to meet government tax compliance increases more and more each year, this year I had to take two days off to gather all the data and do all the ringing around, calculations and Excel spread sheeting to do my return. As an IT contractor this cost me two days not earning my regular income to do this.

My accountant tells me I cannot claim my time (or opportunity cost).

What do people think about this?

That's right. Same as you cant charge yourself a fee, sue yourself or contract with yourself etc.

You can include travel and other costs such as electricity, software, stationery, computer use etc where these are costs incurred in attending to your tax affairs.

 

[BMT Tax Depreciation]

Another common question we get is, "Can I depreciate my own labour?" I.e., they've bought the raw materials for a renovation to save money with a DIY job and then expect to get the sort of tax deduction they'd get if they paid someone else to do the whole thing. Of course, I can see the appeal but it doesn't really make sense when you think about it.

 

[Paul@PFI]

Another common question we get is, "Can I depreciate my own labour?" I.e., they've bought the raw materials for a renovation to save money with a DIY job and then expect to get the sort of tax deduction they'd get if they paid someone else to do the whole thing. Of course, I can see the appeal but it doesn't really make sense when you think about it.

Yet they see a cost saving from DIY...They want to save $ but claim a deduction based on what they could have spent... I kinda wish it was a 458 Ferrari but its a Corolla.

My wife uses a similar logic. She saves hundreds of dollars on clothes, shoes etc. The more she spends the more we save I believe.