Cost to get Tax done

[Tim]

Hi,
I am trying to ascertain whether my Accountant fees are reasonable, too high etc and wondered if anyone can comment based on their experience.
Basically to get our tax (me and spouse) done including 13 properties, a good number of share trades and about 8 or so managed funds statements, virtually all of the information was on a spreadsheet so their was no receipts or records to search through and collate (apart from 8 managed fund statements), however there was some remaining work on depreciation schedules to augment what was setup last year (most depreciation was setup last year).

$1270 for us both - I thought maybe a little steep because everything was pretty much on a spreadsheet.

Any comments or feedback appreciated - thanks.

Tim

 

[Rixter]

On the surface it sounds extremely cheap to me Tim. Tho without seeing first hand exactly what (in terms of quality) you're receiving in return its hard to say whether you are getting good value for money spent.

 

[Tim]

Thanks Rixter, I really don't have much to compare to so it is interesting to hear your comment.

My thoughts were that I provided them all info (mostly) and they were just 'inputting' data but perhaps that is a gross under estimate of what actually occurs.

Tim

 

[The Y-man]

Sounds reasonable, especially if they are going back through your numbers and weeding out any errors you may have made, and finding more things that you may be entitled to.

Cheers,

The Y-man

 

[Tim]

OK thanks Y-Man

Tim

 

[wylie]

I also reckon you are getting a really good deal.

Wylie

 

[MichaelW]

Tim,

I think the fee for my tax return this year is going to be around the $5K mark so I reckon you're doing pretty well too...

But then I've got a company, trust, IPs and managed funds etc. so it probably means a lot more work than returns in individual names alone. With structure comes administration cost.

Cheers,
Michael

 

[Dazz]

But then I've got a company, trust, IPs and managed funds etc. so it probably means a lot more work than returns in individual names alone. With structure comes administration cost.

....and I suppose the people recommending the structure, the ol' solicitors and accountants, are the very chaps who you need to guard against, 'cos they are the ones most likely to attack your structure and sue the living cr*p out of you....and are also the chaps who seem to profit from the ongoing admin......ahhhhh, it's a most joyful setup indeed for them.

and yes, I got caught up in their parlarva as well.


Tim, your annual accounting bill seems cheap for your workload. Is there an untold story or two in there or what ??

 

[Shirley]

We pay around $1800 with 9 properties - we have everything detailed and prepared on spreadsheets ready for the accountant. Ours is very thorough and we're reasonably happy with the service although I would prefer to have one who is also property-savvy and invests in property himself. I did have to convince ours that quantity surveyor fees were tax deductible!
Regards
Shirley

 

[Tim]

Tim, your annual accounting bill seems cheap for your workload. Is there an untold story or two in there or what ??

No there is no untold story, the properties are in our names (no trusts), I itemise everything on the spreadsheet logically for each property, all receipts are also itemised, all they have to do is check off the figures and put them in the return.

Sounds like I am getting a good deal so thanks to all who replied I will be happy with this now.

Regards,

Tim

 

[alexlee]

I agree that if anything your fees are cheap. Even though you give them everything on a spreadsheet, they still have to check it. Also, for depreciation they probably have to enter data from the QS reports into the tax return software, so that takes time too.
Alex

 

[Rixter]

Yeah just imagine how much it would cost if you didnt have it sorted so well for the Accountant - like a shoe box full of statements & receipts

 

[markxr6t]

If all of your info is already spreadsheeted, why not just use the ATO's e-tax software and do it yourself? Its effectively what your accountant is doing with your information - just with a different software suite.

I got sick of reminding accountants what they've missed, convincing them that QS depreciation schedules are valid and paying them for the privilege. I'm sure there's great accountants out there, I just couldn't find one a few years ago and I now quite enjoy using e-tax and their "rental property schedules".

If I'm unsure of anything, I research the ATO law database and/or get the Master Tax Guide or similar out of the local library. However, as most of you would know, your tax knowledge becomes cumulative and you probably already know most of the deductions etc.. as they apply to IPs. When a new situation arises, you just learn about that too.

Mark

 

[Tim]

Mark,

I have thought of that but I buy property each year so setting up the depreciation schedule is always an issue and then my managed funds and share statemetns have to be processed which is not straight forward.

I might have a look at e-tax however I would always be concerned that I would miss something of value - the accountants fees is a sort of 'insurance' against that I guess plus it is less work for me.

Tim

 

[ritchie77]

Hey Tim

You could just get a QS to do your dep schedules (which as tax deductible) then Do it yourself!!!! If only it was that easy eh - well maybe it is...

Also, you say your propertys are in names not trusts... Do you have them in both names - you and your partner?? Or do you split them 75/25 or 99/1 in order to maximise tax deductions???

I have 1 IP and my wife and I split it 99/1 because she works little hours and may actually quit working when we have a baby! (then maybe i should have any future ones 100% in my name???)

Any Ideas guys??

 

[BV]

Hi Tim,

It's not a bad price, but because you do all the preparation you could do better,
you just have to shop around.

The Accountant I see gives me a big discount for preparing the paperwork
for each IP and sorting the receipts out. (I pay half of what I used to pay)

Despite all my efforts I found that he still picks up on my mistakes
or he often reminds me of things I forget to claim so for me it's been a worthwhile expense.

Nothing beats a personalised service, I tried larger firms
but I paid a lot of money and wasn't happy with the result.
Cheers

 

[lbushwalker]

Specialised accountant

I agree with BV,
A knowledgeable accountant specializing in IP rental property tax law is an essential service.
It is good to present your data in electronic format for ease of use by the accountant thus allowing him/she more time to chase all those deductions and write offs not to mention tying loose off ends for the day you get an ATO audit.
It is also good to have a good general understanding of tax laws but leave it to the professionals to put things in practice with complicated situations unless you get a particular joy in playing the little numbers.
Personally I prefer to dwell on the big picture stuff.

 

[markxr6t]

Yes I do agree it would be nice to have the security and experience of a good IP Accountant, particularly when the ATO calls, but until I find someone who finds my mistakes rather than me finding theirs, I'll keep using e-tax. I'm not averse to spending money for good service or things I can't do myself. (like QS Depreciation Schedules), but I am averse to paying for poor service.

The detail in e-tax is almost a mini audit anyway - everything minus the receipts, so the ATO can probably do a low level risk assessment based on this information. I prefer an opportunity to disclose everything up front if it means avoiding investigation later!

As far as big picture vs little numbers goes, doing my own tax is my once a year reconciliation of cash-flows and each property's income/expense profile. So given a tax return is really a statement of Profit/Loss, I actually think its a big picture thing anyway, which guides my serviceability and readiness to purchase my next property. (Just my personal opinion )

And I also always get my depreciation schedules done professionally by a QS - then its just a matter of inputting a number into each IP schedule.

I ditched all my managed funds as i was finding that my self purchased direct investment shares were outperforming them every time (and I'm not a good share investor! )

Mark

 

[Tim]

Hey Tim

You could just get a QS to do your dep schedules (which as tax deductible) then Do it yourself!!!! If only it was that easy eh - well maybe it is...

Also, you say your propertys are in names not trusts... Do you have them in both names - you and your partner?? Or do you split them 75/25 or 99/1 in order to maximise tax deductions???

I have 1 IP and my wife and I split it 99/1 because she works little hours and may actually quit working when we have a baby! (then maybe i should have any future ones 100% in my name???)

Any Ideas guys??

Ritchie,

we have a number of properties and they are all in my name or in joint names as "joint tennants" so 50/50. I don't know if there really is a hard and fast rule on what names to the IP's in, it depends on current and future incomes. However my strategy is pretty simple, most are in my name cause my wife earns very little but my wage is OK, but we have some in joint names for future tax sharing.

Tim

 

[Celeste]

Yeah just imagine how much it would cost if you didnt have it sorted so well for the Accountant - like a shoe box full of statements & receipts

Hi Rixter

Keep in mind that upto may 06 I was a contract bookkeeper.

Don't worry about the accountant, you should have seen the face of an old client after he read my bill for sorting his box of receipts and putting it all on MYOB (tho he had ATO trouble, no GST returns done, partnership break up etc etc - $1500.00. He wouldn't pay I had to take him to court. He then had to pay more.