Learn to do your own tax??
- Thread starter cgw
- Start date
Everyone should know how to do their own tax return.
I don't advocate that people should actually do their own, but if your not equipped with the basics , how can you possibly get your accountant to do the necessary and check his work.
I pay my accountant a lot, but he still makes mistakes ....that I pick up and take him to task on.
Don't get complacent .....its your money we are talking about
Joe D
I don't advocate that people should actually do their own, but if your not equipped with the basics , how can you possibly get your accountant to do the necessary and check his work.
I pay my accountant a lot, but he still makes mistakes ....that I pick up and take him to task on.
Don't get complacent .....its your money we are talking about
Joe D
Pick a family accountant and just instruct them what to do. Should be cheap as chips. Learn as much strategy and techniques as you can on these sites and just ask them the technical questions. They know how to solve accounting problems when presented with specifi issues but will find it hard to provide you with value adding recommendations when presented with your overall circumstances. I have a few IPs, she won't charge me more than $400 this year.
One of the main reasons I use an accountant is to minimize the chance of desk audit !
how many properties or is it a business or a trust you are talking about.
That seems a tad expensive at face value?
If you just have IPs then its not a drama, but if in business then I wouldn't go down that path.
Its easy to do ones taxes and I used to do it but it is so easy to leave out something or a change occurs and you are not aware.
When you get stuck just ring the Tax office.
You just need to do a heap of reading from th etax guides and supplements and then all the schedules , eg depreciation , Capital Gains, Rental Income etc that goes with it
The real problem is remembering everything and then waiting a year to then do it again.
I sometimes pick-up errors by my accountant because of my knowledge or query something which then adds to my knowledge.
If you have a property manager who produces a "Summary Statement" for transactions for the financial year and you prepare a spreadsheet or similar for all the other expenses such as interest that are not covered in the "Summary Statement" then the cost to prepare your rental schedule on top of your tax return cost should not be over $120.00. When added to the cost of a basic individual income tax return the total cost should be around $250 plus GST. In my experience people often don't pay the extra $50 fee to there property manager for the "Summary Statement" which costs them more in accounting fees.
Also once people have properties in Trusts this will increase accounting costs considerably as full sets of financial statements must be prepared as well as trust minutes as well as tax returns.
If an individual lodges their income tax return through e-tax they are exposing themselves to an ATO audit a lot more than if the return was lodged through an accountant. Plus IMHO most people lodging there own tax return actually underclaim and pay more tax.
Some rental expenses I often see people not claiming are:
(1) Not claiming a tax deduction for borrowing expenses on the purchase of an investment property over a 5 year period.
(2) Not getting a quantity surveyor to prepare an asset schedule on a newly purchased property and therefore not claiming maximum depreciation claimable.
(3) Not claiming vehicle costs on travel relating to the investment property. (example: top rate for 07 was 70 cents a kilometre. Up to 5000km can be claimed without keeping a logbook.)
(4) Not claiming interest paid when building an investment property.
(5) Not getting a PAYG variation to assist cashflow and reduce interest expenses.
Also people often sell IP's then contact their accountant to work out the CGT, when if the accountant was consulted earlier it is possible that the tax payable could have been legally minimised.
I think it is false economy not to use a good accountant (yes I am one).
Also once people have properties in Trusts this will increase accounting costs considerably as full sets of financial statements must be prepared as well as trust minutes as well as tax returns.
If an individual lodges their income tax return through e-tax they are exposing themselves to an ATO audit a lot more than if the return was lodged through an accountant. Plus IMHO most people lodging there own tax return actually underclaim and pay more tax.
Some rental expenses I often see people not claiming are:
(1) Not claiming a tax deduction for borrowing expenses on the purchase of an investment property over a 5 year period.
(2) Not getting a quantity surveyor to prepare an asset schedule on a newly purchased property and therefore not claiming maximum depreciation claimable.
(3) Not claiming vehicle costs on travel relating to the investment property. (example: top rate for 07 was 70 cents a kilometre. Up to 5000km can be claimed without keeping a logbook.)
(4) Not claiming interest paid when building an investment property.
(5) Not getting a PAYG variation to assist cashflow and reduce interest expenses.
Also people often sell IP's then contact their accountant to work out the CGT, when if the accountant was consulted earlier it is possible that the tax payable could have been legally minimised.
I think it is false economy not to use a good accountant (yes I am one).
Everyone should know how to do their own tax return.
I don't advocate that people should actually do their own, but if your not equipped with the basics , how can you possibly get your accountant to do the necessary and check his work.
I pay my accountant a lot, but he still makes mistakes ....that I pick up and take him to task on.
Don't get complacent .....its your money we are talking about
Joe D
Couldn't of said it better myself.
Stand up, take responsibility for your money, know 95% of the subject....and take your accountant to task and grill them over the 5% gap in knowledge....and any mistakes they make.
At the end of the day, despite everyone professing the contrary, there is only person who is REALLY interested in your finances.
I do my own tax returns.
You can do it from the booklets provided by the ATO. The first time you go through it, it's very tedious, but the good news is that they don't change that much from year to year, so starting from what you did last year, you're already 80% there.
Sometimes it gets a little bit tricky, I then ask advice from my tax specialist.
Cheers,
You can do it from the booklets provided by the ATO. The first time you go through it, it's very tedious, but the good news is that they don't change that much from year to year, so starting from what you did last year, you're already 80% there.
Sometimes it gets a little bit tricky, I then ask advice from my tax specialist.
Cheers,
Of course everyone is free to do it themselves, but if you do just use the ATO information, it's like getting advice about family planning from a prostitute...
The ATO is not concerned about minimising your tax and won't tell you how to, just how to do the "right" thing,in their opinion, of which you will get many and varied.
On the other hand your tax accountant should be primarily concerned with minimising your tax, and as others have said, waiting until after 30th June to calculate your CGT or other tax position is not the best way to get the most value from your accountant. Most won't or shouldn't charge you for general advice during the year.
Of course I am biased, but I can also see the things that self preparers miss, and having an accountant on your "team" is a smart idea, in the same way as a solicitor is for legal matters, an RE agent for sourcing property, or a broker for finance.
Without these people helping you it is almost guaranteed that you will make unneccessary mistakes, and if you don't make the mistakes then you should be in the profession and start charging others for your services...
The ATO is not concerned about minimising your tax and won't tell you how to, just how to do the "right" thing,in their opinion, of which you will get many and varied.
On the other hand your tax accountant should be primarily concerned with minimising your tax, and as others have said, waiting until after 30th June to calculate your CGT or other tax position is not the best way to get the most value from your accountant. Most won't or shouldn't charge you for general advice during the year.
Of course I am biased, but I can also see the things that self preparers miss, and having an accountant on your "team" is a smart idea, in the same way as a solicitor is for legal matters, an RE agent for sourcing property, or a broker for finance.
Without these people helping you it is almost guaranteed that you will make unneccessary mistakes, and if you don't make the mistakes then you should be in the profession and start charging others for your services...
Hi CGW,
I would prefer to get my tax filed through a tax agent though my wife and myself do all the excel sheets and everytime we calculate more refund than our agent. The benefits of doing it through the agent are :
1. Less or no chances of being audited as compared to getting it done by self.
2. In case there is a tax audit, then the agent will take care.
I strongly recommend knowing the basics it helps.
Ur tax agent charges a lot of money. Does he get you more refund than his fees ?
Cheers
