Tax accountant or not

[SYL]

Hi everyone

Just wanting to see the experience of others with tax accountants and the benefits.

How useful are tax accountants? I've used an accountant before for simple tax returns, didn't seem to get any benefit (well it was a simple tax return I could have done it myself) was charged for quite a bit in my opinion for tax returns that had errors (note the plural) and near zero customer service. Didn't seem to get any benefit in going to an accountant.

Now as a novice investor (not many properties or complex investments) who earns a decent wage but not exactly a high income earner (under $100k) is there still any benefit of a tax accountant? As it seems only really high income earners seem to benefit from a tax accountant?

Does everyone benefit from a good tax accountant and how? Does anyone want to share how the benefited? How did you make use of your tax accountant? So far I've had zero return in investment.

Any good ones in Sydney?

I'm a novice and haven't exactly been impressed with the ones I've met before, so you could say I'm a bit skeptic. Would love to hear from all you seasoned investors out there.

 

[Joe D]

A good* accountant should be able to save you at least his fees for service (or multiples of it), otherwise why would anyone use one?

Also you won't know what you don't know if you never use one.

(*not all accountants are good)

 

[nhg]

I regret not using one earlier.
A good one that is, like any industry, most don't have a clue, or are not property oriented.

I am 26, on a good income though, I just recieved my 2011-12 tax return putting $7k in my pocket. This was the year I purchased my first IP which is a 50 year old fibro house.

I was aware of most of the deductions due to researching it previously, however with some consultation they added about $2k.

Looking forward to my 2012-13 FY return as I purchased 2 more, newer properties that year.

I use Keshab Accounting based in Sydney, though I've heard great things about House of Wealth in Melbourne. I only met my accountant once face to face, and that was a year after I first used his services so distance isn't really an issue.

 

[Rolf Latham]

I'm a novice and haven't exactly been impressed with the ones I've met before, so you could say I'm a bit skeptic.

Perhaps thats part of the problem, but the great thing is that you have realised that maybe there is more to this than is obvious.

A good accountant does a BUS LOAD more than tax. Many good accountants with good business experience can help you refine your goals, provide a sounding board and almost as an aside make sure you are sorted on the tax side of things.

ta

rolf

 

[nhg]

Perhaps thats part of the problem, but the great thing is that you have realised that maybe there is more to this than is obvious.

A good accountant does a BUS LOAD more than tax. Many good accountants with good business experience can help you refine your goals, provide a sounding board and almost as an aside make sure you are sorted on the tax side of things.

ta

rolf

Agreed. Should have noted, both accountant firms I mentioned are boutique and offer consulting services. Goal setting, setting up trusts, amongst other things. 'Expensive' but well worth it. If there is one thing i've learnt, paying good money for good advice is worth every cent.

 

[moyjos]

Perhaps thats part of the problem, but the great thing is that you have realised that maybe there is more to this than is obvious.

A good accountant does a BUS LOAD more than tax. Many good accountants with good business experience can help you refine your goals, provide a sounding board and almost as an aside make sure you are sorted on the tax side of things.

ta

rolf

+1. When you go "accountant shopping" have a list of questions ready. Do they invest in property themselves? (if you are in business) do they own the business or just work there? obviously you get these answers in general conversation . Basically you want your team to be on the same page as you.

 

[Angel]

My first foray into using an accountant was a waste.

Yes he owns his business, yes he is a property investor himself, and of course you will make a good return with this property. It dropped $50 k in value 6 months after purchasing it and has been very difficult to rent.

 

[Terry_w]

Accountants or tax agents more correctly could help you save money by reducing your tax or giving you advice on how to structure things. But this will all depend on your situation. If you are a straight paye employee with no investments there is little scope but as your situation becomes more complex there are more potential things to claim and potentially greater savings.

But you also need a proactive accountant who is going to point things out to you and not just punch numbers you give into their software without comment or analysis.

 

[marks]

My recent personal experience sounds similar.
My tax agent was efficient, approachable and had we a great relationship for more than 10 years.
But I found it was more a service for the ATO rather than me.
What I mean by that, it was a Q&A session on what I could claim and what I couldn't. I was doing the investigation and working out what was good for me. It was a service to help me fill in a tax return. I'd expect that is what you are feeling right now.
I've changed at the beginning of the year and found someone who was more strategic and finally building ideas and strategies which are making HUGE benefits in my tax, cashflow and goal setting. Challenged me to understand what I wanted and how I used my cashflow. Doing this substantially drives better tax effectiveness.
I started on this journey after being told (often) trusts are not for me but after continuing researching (and this site is a great resource) the benefits that a defined structure gives. I then went to find someone who gave better counsel on this, than my current contacts.
How much? Not cheap. About 3x my current tax agent fees. Worthwhile? I have now halved the time to meet some goals and cashflow & equity for property is increasing.
PM me if you want details. Also look into accountant posters on this site. The answers they give are priceless and give you an insight on how strategic they can be for you.
Cheers.

 

[westminster]

My first foray into using an accountant was a waste.

Yes he owns his business, yes he is a property investor himself, and of course you will make a good return with this property. It dropped $50 k in value 6 months after purchasing it and has been very difficult to rent.

But accountants aren't there to tell you what to buy, or advise that it will go up in value nor how easy it is to rent.
You need to draw a line on what an accountant can do for you. If they are offering investment deal /IP finding then they are likely in bed with a developer and you should not use them.

 

[MRO]

The best accountant isn't necessarily the one who gets you the biggest refund. The best accountant is the one who gets you the refund you are entitled to and ensures your return is compliant. People always forget this. I use to be a tax accountant and people would say things like 'my friends accountant is much better because he got a $10k refund'. Statements like this are totally irrelevant, who knows what their friend earnt or what tax they paid or investment losses they had.
I found that a lot of people are just lazy and cannot be bothered filling out the ATO forms themselves. All basic wage earners should be able to do this and even those with basic investments should be able to do this.

Agree with a few of the comments above regarding getting more than just a tax return from your accountant but be prepared to pay for it.

I would not be taking advice from an accountant on where to buy property either. We are not formally trained in this area so you could probably get equivalent advice from your local postie/shop owner/neighbour. However a lot of us have a personal interest in property investing and can certainly advise on the tax implications/cashflow implications/structuring.