He's in Sydney. If you'd like to know PM me. I don't feel comfortable putting his details on a public forum.
Do you find errors in your tax done by accountants?
- Thread starter wylie
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He's in Sydney. If you'd like to know PM me. I don't feel comfortable putting his details on a public forum.
H&R, ITP...Some are really great small practitioners who own the local area franchise and have great businesses. However some staff are unqualified and inexperienced with little but a short course. I always wonder what the expectations are when someone walks into a office that advertises tax returns from $79. Really all you are paying for is someone who doesnt know. I would think its OK to ask the person if they are a qualified tax agent or how many years they have been in practice.
I can compare this to someone with 20+ years experience. I know most answers. Those I dont I tell you I need to check. Its complicated. I want to get it right. And checking it often doesnt take long since I know what I'm looking for. A novice will take some time as generally key concepts overlap.
And contrary to some views that the client signs the return - thats outdated. The agent has obligations too. The Tax Practitioners Board has an expectation that tax agent services are professional in 5 key areas:
?Honesty and integrity
?Independence
?Confidentiality
?Competence
?Other responsibilities.
A simple test that sorts the pro's from the novice : Ask your tax agent to explain the merits of preparing a logbook. Just that. Say no more. First thing they should explain is the different 4 methods you can choose whicheven gives highest deduction that you are eligible for. Basic rule is if you think /believe/know your use is more than 33.33% then do a logbook or your deduction is limited to 1/3rd. No logbook means 1/3rd is your limit. If so explain the requirements of a logbook. They should also explain two methods are ONLY available if you do more than 5,000km for deductible travel. One method is capped at 5,000km, no more. If they explain it properly they should mention the 5,000km method is PER VEHICLE. Yes you can double dip and it might maximise your claim. Lastly the method for 12% of the cost of vehicle - Good for old cars and claims without substantiation. Usually low value.
A simple test for property investors : Tell them you thinking of reno your kitchen and this included walls, tiles, appliances wiring, plumbing etc. Cost $24,000. Tell them kitchen people only give a single cost no breakdown. Nothing itemised. How & what do I claim ?? There is only one correct answer...Get a depreciation schedule or have the existing one updated. Any waffle about doing it other ways is poor guidance or a risk.
Outdated ?? What ?? The taxpayer signing their return and taking responsibility for it when they submit it to the ATO is outdated ??
Go on forum members. Try that on for size with the ATO auditors and see how you get on. Good luck with that.
Fortunately you've got a legal disclaimer on all of your posts Paul, where you formally disclose you're just dribbling general comments, warrant nothing and don't stand behind anything you actually write.
Goodness me. Quivering with anticipation for you to quote the part of the Tax Act, with your 20 years of experience stating where the quaint notion of a taxpayer having to sign their return is "outdated" and therefore.....what ??
The tax agent has responsibilities to conduct their business honestly and not be shonk etc, but the ultimate responsibility resides with the taxpayer.
Here's the declaration that the taxpayer signs:
I declare that:
- the information provided to my registered tax agent for the preparation of this tax return, including any applicable schedules, is true and correct, and
-the agent is authorised to lodge the return
In other words, it's the taxpayers responsibility to ensure their tax return does not contain errors or omissions.
We occasionally have clients who wish to claim a deduction against our advice - which is absolutely their right. Because, if it comes back with a query from the ATO, it's the taxpayer who is ultimately responsible.
Exactly what I said many moons ago.
Palming your accounting affairs off, onto some highly paid or even lowly paid accountant is not on. It's always in your lap, always.
Change accountants Wylie.
Unfortunately, high accounting fees does not necessarily mean you will get the best service.
We got royally ripped off for years, I think we funded his children's education for the last 5 years. When I queried his invoices, his standard answer was "you pay peanuts you get monkeys", got tired of this one.
We moved on and reduced our bill by at least 60%, excellent service and not so much pain.
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This. Etax it up!
It's so easy to use, plenty of explanations in the software and if you are not sure you can just look it up or call the ato. I have been doing my own personal tax returns for the past 10 years like this. Never had a problem. Takes about 30 minutes to an hour to do if you have your paper work in order. The most time consuming part is entering the depreciation for the properties as you acquire them but you only need to do it once and then it rolls it over the next year.
Software automatically downloads and enters your group certificate figures, medicare, help debt etc.
I would not trust myself with eTax. We have trust distributions which is split into different areas that I don't even understand - non-primary production, plus franked distributions, less franking credits. I have no clue where these figures come from, but I think they come from the accountant.
And we've had the winding up of estates, shared properties with parents etc. No way would I do it myself. Going forward, once all this is wound up, things will be simpler and that is when we will look around for a different accountant.
For a simple return, I could wade through eTax, but not our return.
It's all in there Wiley. At one stage I was doing trust distributions with it too.
Try it for fun (not that tax is fun!) Get the hard copy of your return last year, download etax, go through the questions and enter it in. You will see it's really very easy.
Sometimes I think accountants want to make it sound harder and more complex than it is to keep them in a job! The way Etax works by walking you through the questions I fail to see how you can make a mistake with it provided you are putting in the correct figures.
Try it for fun... yeah right
I think I'll stick with paying the accountant.
Ok180 is right! It's worth having a go of etax. I use etax to double check my paperwork. I do most of the return myself and get accountant to double check it. You don't have to lodge through etax, you can just print out the prefilled info.
Confused by this. The ELS Declaration requires the taxpayer to sign the form saying that "the information provided to my registered tax agent for the preparation of this tax return is true and correct." So by overstating their income doesn't that make it a false declaration for which criminal penalties could apply ?
The taxpayer may SHARE responsibility. However an agent has obligations with the Tax Practitioners Board and always to the client. The TPB even recognise that the client may enjoy "safe harbour" protection if the agent stuffs it up. ie No penalty. The old defence of "the client signed it" is no longer an acceptable defence in many instances.
This and compulsory PI cover are some of the modern practices that make the former practice of blaming the client outdated.
Income "substantiation" rules dont exist. I can call anything income and be wrong. Who would ?? Who wants to overstate income ? Its an overlooked strategy. ie " My wife gives me $$ for shopping or I draw funds on my card. Hence its impossible to prove its wrong.Its akin to the fact nobody actually gets penalised for failing to lodge a return !! Instead they issue a Notice to Lodge and the criminal offence is failure to comply with a Notice. (s353-10).
A paper return or an amendment request doesnt have an ELS declaration. ?? A non-agent return ?? Only agent forms have it. I suspect the ELS declaration is a hangover from professional bodies. Ditto many encourage client sign off on the substantiation rules too. ATO dont require it. And ELS declaration isnt actually lodged - Its not made to the Cmmr. Its made to the agent.The taxpayers declaration just refers to what was given to the agent too. And it refers to the self-assessed issue and cautions ATO may amend if there are inaccuracies....What law says I cant overstate income ?? Where are Commr powers to exclude excessive income declared by a taxpayer ?
You are looking for the magicians hands to move...Look at the assistant.
For my privacy I'm an agent and use etax - It sucks !! Its riddled with complexity. Often worded to discourage claims too. Its hides simplicity with loads of details at times and little detail at others. Used to contain a major error too - For years !! ATO used to allow taxpayers to retrospectively claim capital losses not claimed in prior years... I encountered a client who needed to rely on this issue and asked for a ruling. Commr agreed it was a mistake and nevertheless allowed taxpayer to use e-tax to claim those losses. Next year it was gone !
Good example is the self-education section. It automatically deducts first $250 when thats not always the case.
etax is hours of your life lost forever.
eTax sure does have issues. I always used to use the old manual form and studied tax accounting at uni as part of a post-grad degree. I also bought the master tax guide a couple of times so I'm across most of the issues with my tax return. If it's something I don't know then I've got pretty good at searching ATO.
After using eTax for 10 years, I can smash out a tax return pretty quickly... mine are not complicated. However, I did come across a bit of a strange one last year. I sold my PPoR after renting it out for a couple of years which should have been CGT free. However, the way eTax collects the data, I could not find a way to declare I had a CGT event but that it should be disregarded. Someone who didn't have detailed knowledge of CGT exemptions could have been slugged a fair amount of extra tax. In that case I would advise them to seek professional assistance... provided they could find a good accountant.
A paper return doesn't have an ELS declaration because it's not lodged electronically. A paper return or an amendment requires the taxpayer to sign, stating that the information provided is true and correct, just as the ELD does.
It has nothing to do with the professional bodies, it's an ATO requirement that the ELD be signed before the agent can lodge the tax return.
Perhaps you could define substantiation for the great unwashed?
My understanding is that it's 'proof' or 'evidence' of a deduction (or in the matter you're discussing income) that is acceptable to the ATO.
So if my generally allowable deduction is a light globe then the substantiation is a receipt.
If my generally allowable deduction is business use of a car (and I use the log book method) I can prove that I've used the car for business for X% by using a log book for a period of 12(?) weeks every 5(?) years.
You seem to regard the making of statutory declarations as a frivolous matter
My mate was an accountant, clients of his were audited and fined by the ATO to the tune of around 750k.
They had to pay it but the clients then turned around and sued their accountant and won. This started a chain of events, but he has pretty much lost everything.
Anyway, you can have all the disclaimers in the world but you still have a duty of care to your client.
If everything was so black & white we wouldn't have lawyers and keep in mind no matter what the lawyers tell you, at the end of the day 50% of them are wrong in every law suit.
They had to pay it but the clients then turned around and sued their accountant and won. This started a chain of events, but he has pretty much lost everything.
Anyway, you can have all the disclaimers in the world but you still have a duty of care to your client.
If everything was so black & white we wouldn't have lawyers and keep in mind no matter what the lawyers tell you, at the end of the day 50% of them are wrong in every law suit.