is my accountant ripping me off?

streetie

streetie

I am a sparky by trade have been working in karratha in the mines. last financial year i paid $33,253.00 in tax.

I bought my first IP in April this yr. so only had a few months to claim it till the 1st of july on my first tax return.

All i got back this year was $1497.04.

And my accountant bill was:
time devoted to personal lodgement $250
time devoted to IP lodgement $260 (only had IP from April)
GST=$51
TOTAL=$561


So after i pay that bill im left with $936 bucks.....which i thought was pretty poor.

does this seem right?
 
Hi streetie,

Its pretty hard to know if you got a raw deal or not just by looking at the tax you paid, for example if you earnt a cool mill last year paid 33k tax and got tax back then I reckon you should be pretty chuffed with your accountant, on the other hand if you earnt 70k then you should give him the boot...see what I mean?

If your not happy give your tax person a call and get them to take you through the return.
 
yeah i think it was.. i had my usual stuff for my personal tax, tools, car, work related stuff etc.....didnt have that much this year.
then i had all the invoices and stuff for my IP...rental statements, bank statements showing interest, strata, council, water etc..

I bought it April 11 and financial yr finishes June 30th. So either I didn have it long enought to get some descent tax breaks from it or my accountant didnt get a good return for me.

I also thought $561 is pretty steep for quite a simple tax lodgement?
 
Really there is still not enough information.

Owning an IP doesn't immediately mean you get tax back. Depends on what the difference is between your income from the property (rent) and the outgoings (rates, PM fees, mortgage interest - which is the interest component only, not the full payment if paying principal).

You can't claim anything in relation to the purchase - stamp duty, conveyancing costs etc - until you sell the property.

I think your accountants fees are very reasonable, especially if you haven't done spreadsheets with all the costs and income laid out.

Although - I think your tax paid is high for your income. The ATO website has a calculator on it so that you can work out approximately how much tax you should pay ... I'd give it a burl.
 
Last edited:
Hi,

I am in Sydney and my accountant charges about the same. I have 1 IP, usually some business income plus PAYG salary and this year is the first time I am submitting share dividends. I usually provide all my data in spreadsheets, set out to be easily read.

I find the cost worth it because one year my accountant found I was able to claim a small business offset (or something like that) and it worked out to be an extra $1k in my return.

I also use a tax calculator such as this:

http://au.pfinance.yahoo.com/tips-and-tools/calculators/income-tax-calculator/

to help work out how much I will owe. This calculator says that your tax bill should be around $30k with no deductions (excludes medicare charges).

If your IP is making a loss, the loss is a deduction, which should bring your taxable income down (and therefore pay less tax). But if it is positively geared, you will pay extra tax on the profit you make.

Check out the "taxable income" on your return. If that is less than $114k then you probably should not be paying $33k in tax. If it is above $114k, then it sounds like you are paying the right amount.
 
Did your accountant calculate any borrowing costs for your investment property? Also, did you get a depreciation report done on the report? Some accountants only work out your tax return based on what you give them so if you are missing something they may not ask for it. If you live in Karratha then are you may be entitled to a zone rebate. Something else to check.
 
Streetie, as Lizzie says, we need more information to get a clearer big picture.

How old is the IP?
How much Capital & Fittings/Fixtures depreciation did you claim?
How much is the annual rent?
How much interest to the bank did you pay on the IP loan/s?
How much in insurances did you pay?
How much did you pay in property management fees?
How much Water rates did you pay?
How much Council rates did you pay?
How much in repairs/maintenance did you pay?
How much in strata fees (if applicable) did you pay?


I hope this helps.
 
The amount of your refund and the accountant's bill are two separate things. Comparing the refund to the bill is pointless.

You mention that you gave the accountant all your rental statements, bank statements, rates etc. I assume you did the same for the work related things?

If you want a lower bill, do a summary for your accountant, don't give him all the paperwork. He then spends less time doing your tax return (ie, not having to add up all the interest etc) and you then he charges you less.
 
Brissie Accountant

Just done mine and DH returns
Me - personal income, investment portfolio, 3 x IPs = 385 inc
DH - personal income 1 x IP = 221 inc
No trusts etc
Sounds like I am getting a good deal but everythign is organised - he does his check list and I give him the appropriate piece of paper
 
Heh, its good having many accountants as clients.

There is a sole trader accountant across the hall from my office, I give him a bit of IT support here and there (eg my printer wont print) and I get my personal tax + IP's for $120 :)
 
have you considered investing a little bit of your own time in understanding your taxes and keeping your records organised throughout the year, and then doing your own tax return at the end of the year?

if you only have salary and IPs (ie: no businesses, trusts, partnerships, joint ventures etc) ... you might be pleasantly surprised at how straight forward it is

the paper version is much easier/quicker to fill out than the online version (if you dont mind waiting 2-3weeks extra to receive the refund)
 
cadence said:
the paper version is much easier/quicker to fill out than the online version (if you dont mind waiting 2-3weeks extra to receive the refund)
Click to expand...

I would disagree the online version is a hell of lot faster if you are computer literate.
These days it fills half of it in for you.
Plus all the sections/entries are linked to the appropriate help area.
 
I would be canning that tax agent for sure...:eek:

I just did my personnel tax and 3 IP's for a total of $410 :cool:

Couldn't be happier with my current agent, I had a agent charge similar amounts to what you got, wasn't happy with the price or their service to be honest.
 
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