How to determine if an accountant is good?

[cceasy]

I'm curious in the past we used an accountant for our previous investment property... He claimed where he could and with receipts we provided etc... But I hear people talk about how good their accountant is and how much money they get back I just want to know how can you determine if your accountant is doing a good job?

Other than providing an accountant with receipts etc, should a good accountant find legal loopholes to get the best return for you? In my experience, my accountant would ask me for all the receipts for bills, repairs and interest rates. Then ask about work related claims and donations etc... and then works out how much I owe or how much I get back... Is that the norm or should they do more?

 

[Jamie M]

They explain things easily, they answer your questions, they're reasonably efficient, they have a good understanding on investment property structuring.

After one meeting/phone chat you should be able to gauge whether you're onto a winner or not.

Failing that - ask friend/family/the forum for recommendations.

Cheers

Jamie

 

[Propertunity]

How to determine if an accountant is good?

All the above as well as:
1. They & / or their clients stand up to an ATO audit
2. They & / or their clients don't end up in jail

 

[chilliblue]

Start with searching:

1. Institute of Chartered Accountants in Australia.
2. Institute of Public Accountants.
3. Certified Practicing Accountants of Australia.
4. Recommendations from family and friends.

Once you have created a shortlist of accountants, contact them and find out:

Specialisation - What services do they offer? Do they regularly deal with people in similar situations to you? If you have specific needs, make sure your accountant has experience in that area. If not you may have to pay for a more specialized service.

Customer service - Do they provide a good service? Make sure your accountant responds to phone calls and emails promptly. You may also want an accountant that communicates in plain language, not financial jargon.

Fees - What will you be charged, and when?

Registered - If they are going to do your tax return make sure your accountant is registered at the online tax and BAS agent register.

Qualified - Are they a member of a professional association? If they are, they have to meet the standards of the association. It also means you can complain to the association if you're not happy with your accountant.

 

[Paul@PFI]

Forget about basing the quality of any tax professional by size of a refund. That's likely to indicate a problem rather than a benefit. I cant create a tax refund. Also just searching local directories and the web means little as a website wont tell you much. There are plenty who claim to know property taxes but lack skills. Others are brilliant and so busy they wont even take you on.

Word of mouth referrals from other investors is a great start. Here also.

Legal loopholes. LOL. You wish. Reality is there are common misconceptions and common mistakes made by tax agents and taxpayers with IPs but otherwise the numbers are what they are.
- Maximise depreciation claims
- Deduction timing eg arrears of land tax, interest in advance etc
- Diligence with repairs so you don't overclaim
- Get borrowing expenses correct (Don't claim over 5 years is my best tip !)
- Loan structure / use of funds and deduction mistakes

 

[cceasy]

Thanks guys... word of mouth sounds like the way to go...

Paul from what I've seen on the forum, you and a couple of others come highly recommended. Accounting is like another language to me... I would like to use your services during tax time.

I'm probably one of those tax payers who miss things due to lack of knowledge.. The items you mentioned;

- Maximise depreciation claims - You mean the depreciation schedule or something else all together?
- Deduction timing eg arrears of land tax, interest in advance etc - Not sure what you mean by this... So far I'm under the threshold in regards to land tax... What do you mean interest in advance?
- Diligence with repairs so you don't overclaim - Not sure what you mean... If a hot water system fails and you replace it then claim it, isn't that the norm?
- Get borrowing expenses correct (Don't claim over 5 years is my best tip !) - Not sure what you mean... Are you referring to claiming the interest rate I have to pay? When you say don't claim over 5 years what do you mean? I thought you were only allowed to claim last financial year
- Loan structure / use of funds and deduction mistakes - It's interest only with offset... I park money in the offset to reduce interest.

Please excuse my noob questions. I have a lot to learn i know

 

[Paul@PFI]

Depreciation schedule is very important. I always advise that until a QS says don't bother, you do bother.

You may be under thresholds but I recommend you register anyway. One day they may send an assessment if values go up or thresholds come down.

I will give an example about the HWS. Its not a repair but its depreciable. The old HWS can be written off however. You see what I mean about diligence.

Borrowing expenses for a loan are tax deductible. Over 60mths, not 5 years. (Yes there is a difference). Also when refinanced balance can be claimed and new amount resets to another 60mths.

IU hope the offset is against your non-deductible for PPOR if you have a non-deductible loan.

Tip : Make sure you get onto the tax agents books before 30 October or earlier. You can lodged late once this happens.

 

[Terry_w]

Forget about basing the quality of any tax professional by size of a refund.

This is exactly what most people think of as 'good' - the size of the refund. But this means nothing if the employer has withheld more than required or the expenses are extra large this year.

 

[cceasy]

The PPOR is almost paid off... The 2 investment property I just bought is setup with interest only with offset... Once I paid off the PPOR I plan on parking my income in the investment loan as I build up my portfolio... I look at it as reducing interest but at the same time saving so I have a buffer to fall back on should something arise like no tenants etc... Is that an ok approach?

I didn't realise I could claim on borrowing cost... so something like deposit bond is claimable?

Yep I plan on registering land tax just in case as you mentioned...

To be honest I don't think I have the nack for accounting so will leave that to the experts...

Is there anything I need to do now in preparation for seeing yourself come tax time or just gather receipts as per usual?

 

[Azazel]

I didn't realise I could claim on borrowing cost... so something like deposit bond is claimable?

I didn't know this until recently either, but you can add the cost of LMI to your loan and it is deductable over 60 months.

 

[D.T.]

Usually by how many mistakes they make. Unfortunately its hard to tell until you've used their services.

 

[Paul@PFI]

The PPOR is almost paid off... The 2 investment property I just bought is setup with interest only with offset... Once I paid off the PPOR I plan on parking my income in the investment loan as I build up my portfolio... I look at it as reducing interest but at the same time saving so I have a buffer to fall back on should something arise like no tenants etc... Is that an ok approach?

I would have an offset account. Firstly against PPOr and when that repaid against the IP loan

I didn't realise I could claim on borrowing cost... so something like deposit bond is claimable?

No. But fees and LMI etc are

Yep I plan on registering land tax just in case as you mentioned...

To be honest I don't think I have the nack for accounting so will leave that to the experts...

Is there anything I need to do now in preparation for seeing yourself come tax time or just gather receipts as per usual?

NO RECEIPTS !!! (Unless you are unsure ie repairs) You want to pay me to add up paper ?? Contact me by direct email below and I can provide a comprehensive summary schedule that assists with summary for each IP and CGT costs. (Don't ignore CGT - One day its a tax you or your kids will pay)