The cost of tax accountant - is this reasonable?

[alexlee]

Just remember, you're focusing on price because you don't understand the value an accountant can give you.

However, you don't know what you don't know, so there might be benefits from structuring, say, that a mediocre accountant may not understand. They won't advise you and you won't know to ask them.

For a simple tax return and 1 property, maybe there isn't much value a good accountant can add over a mediocre accountant. However, be aware that good accountants will be more expensive, and you have to constantly review your own affairs and decide whether you need to upgrade. Problem is, you need the knowledge to assess your own needs.

 

[EN710]

Just remember, you're focusing on price because you don't understand the value an accountant can give you.

However, you don't know what you don't know, so there might be benefits from structuring, say, that a mediocre accountant may not understand. They won't advise you and you won't know to ask them.

For a simple tax return and 1 property, maybe there isn't much value a good accountant can add over a mediocre accountant. However, be aware that good accountants will be more expensive, and you have to constantly review your own affairs and decide whether you need to upgrade. Problem is, you need the knowledge to assess your own needs.

The focus on price is because the price jump from no property to one property seem to be a bit steep (was $165 per person last year), so I want to check whether this is normal - as you said, I don't know what I don't know

Re value of a good accountant - I think you're right, I probably won't know for 1 property, especially when I have no comparison on what's a 'bad' accountant looks like (any story to share?).

Probably (and hopefully) will be able to see the difference when I have the next next properties as the ownership structure will eventually change.

Congrats - always pays to ask!

Thank you for the suggestion!

 

[alexlee]

Re value of a good accountant - I think you're right, I probably won't know for 1 property, especially when I have no comparison on what's a 'bad' accountant looks like (any story to share?).

The worst accountant stories are the hidden ones. The ones where you COULD have done better if you'd received good advice.

Sure, there are the ones where the accountant creates a lot of elaborate structures for no reason other than being clever and getting more fees. However, there is damage by omission.

e.g. someone's business fails and they lose everything, but if they'd received good advice and segregated assets, they might not have lost everything.

Or simply structuring for flexibility in terms of income streaming, succession, etc.

 

[Peter_Tersteeg]

Comparing what you're quoting to what my accountant charges (who's not on Somersoft), I don't think there's any overcharging going on here.

Our personal returns run to about $1000 a year and the business return is similar. They also break it down with individuals, properties & trusts. The figures in the breakdown are similar to what has been quoted here.

 

[EN710]

Comparing what you're quoting to what my accountant charges (who's not on Somersoft), I don't think there's any overcharging going on here.

Our personal returns run to about $1000 a year and the business return is similar. They also break it down with individuals, properties & trusts. The figures in the breakdown are similar to what has been quoted here.

That's good to know.

Thank you all for the feedback!

 

[mark213]

$253 for 1 IP and 2 personal returns for us

 

[Dean2012ad]

$253 for 1 IP and 2 personal returns for us

Thats about the same for us, although I have 2 IPs.

I took it to an accountant once 2 years ago to make sure I was getting it right.

I do it on etax myself now. You still have to do all the document gathering and sorting anyways which is most of the time consuming work. If I was paying $300 pp i'd want them to sort my box of random documents

I'd say take it to your accountant the first year you have your IP with depreciation schedule as that will give you a basic layout so you can do it yourself in further years. And ask your accountant questions so they can teach you how to do it yourself. Its not hard!

 

[EN710]

Thats about the same for us, although I have 2 IPs.

I took it to an accountant once 2 years ago to make sure I was getting it right.

I do it on etax myself now. You still have to do all the document gathering and sorting anyways which is most of the time consuming work. If I was paying $300 pp i'd want them to sort my box of random documents

Haha, yes. I did sort all the numbers very early so I can send it before they get too busy. I think they'll be fine if for me to just send them tons of documents - the thing is, I want to know what's going in there (talking about being neurotic) so I sort the docs anyway. Also, I will be paying $$$ additional tax this year, so I need to know the approximate number to be mentally (and pocketwise) prepared before getting that "pay your tax" letter from ATO.

I'd say take it to your accountant the first year you have your IP with depreciation schedule as that will give you a basic layout so you can do it yourself in further years. And ask your accountant questions so they can teach you how to do it yourself. Its not hard!

Yes, I asked them to do it anyway, as long as it is correct I might be able use it as some sort of template for next year

 

[Terry_w]

To work out if it is worthwhile paying $x to lodge a tax return you could base this on a number of factors, including:

1. How long approx did you meet with the accountant, talk to them, and for them to process it
2. How long it would have taken you to do it yourself
3. How much did they 'save' you - may not be readily apparent.
4. How much do other accountants charge for a similar job.
5. Qualifications of the accountant - a masters in tax would be worth more than one with a tafe diploma for example.

 

[Tillie]

5. Qualifications of the accountant - a masters in tax would be worth more than one with a tafe diploma for example.

This probably shows how naive I am, but I honestly thought that the person can only use the title accountant if they have CPA, CA, Masters degree or something similar on the top of their under graduate degree. Do you mean that if I do Tafe course I can call myself accountant? However I suppose as in any profession if you have tons of experience you do not necessary need piece of graduation paper to,prove that you can do as good job if not better job than just graduated accountant.

 

[Terry_w]

This probably shows how naive I am, but I honestly thought that the person can only use the title accountant if they have CPA, CA, Masters degree or something similar on the top of their under graduate degree. Do you mean that if I do Tafe course I can call myself accountant? However I suppose as in any profession if you have tons of experience you do not necessary need piece of graduation paper to,prove that you can do as good job if not better job than just graduated accountant.

As far as I know the word 'accountant' is not restricted. Anyone can use it. CA and CPA would be trademarked, but being one, either, doesn't in itself allow you to lodge a tax return.

To lodge tax returns you need to be a licensed 'tax agent'. To do this I think you may not even need a degree. someone who has worked at HR Block for 10 years without any degree or diploma could be entitled to become a tax agent.

In general conversation people may say 'accountant' when they don't actually mean accountant but someone who does tax returns - a tax agent.

 

[coastymike]

Not under the new tax agent services 2009 http://www.tpb.gov.au/TPB/Qualifica...d_experience_requirements_for_tax_agents.aspx

much harder to be a registered tax agent now

 

[Terry_w]

Not under the new tax agent services 2009 http://www.tpb.gov.au/TPB/Qualifica...d_experience_requirements_for_tax_agents.aspx

much harder to be a registered tax agent now

Coasty,

see Schedule 2 to the TAX AGENT SERVICES REGULATIONS 2009

206(b) the individual has been engaged in the equivalent of 8 years of full-time, relevant experience in the preceding 10 years.

http://www.austlii.edu.au/au/legis/cth/consol_reg/tasr2009306/sch2.html

 

[coastymike]

Agreed terry but they must also be a voting member of a registered tax association. Most of those organisations now require various courses to be completed before membership is approved. All are quite hard to get into and itp courses wont suffice http://www.tpb.gov.au/TPB/Qualifications_and_experience/0026_Recognised_tax_agent_associations.aspx

you left out 206(a) which must be read in conjunction with 206(b)

 

[warrenblack]

I am a lawyer and accountant, and the fees sound very reasonable to me! Fees vary considerably, and it depends on the service you are getting so you ask those questions. In the end, however, you get what you pay for.

Warren Black

 

[Terry_w]

Agreed terry but they must also be a voting member of a registered tax association. Most of those organisations now require various courses to be completed before membership is approved. All are quite hard to get into and itp courses wont suffice http://www.tpb.gov.au/TPB/Qualifications_and_experience/0026_Recognised_tax_agent_associations.aspx

you left out 206(a) which must be read in conjunction with 206(b)

Yes true, but look at the list - member of the financial planning association or Australian Institute of Quantity Surveyors or the Self-Managed Super Fund Professionals Association of Australia are included.

 

[orangestreet]

$350 p/h

I have been quoted $350 per hour (consultation) plus a 'reduced' hourly fee to file our tax return this year. We have 1 IP, two personal returns.

I have been told that it usually takes a two hour consultation the first time.

Is it me or is this ludicrously expensive. Even for Canberra standards?? This accountant is based in North Lyneham in Canberra.

 

[EN710]

I have been quoted $350 per hour (consultation) plus a 'reduced' hourly fee to file our tax return this year. We have 1 IP, two personal returns.

I have been told that it usually takes a two hour consultation the first time.

Is it me or is this ludicrously expensive. Even for Canberra standards?? This accountant is based in North Lyneham in Canberra.

Can't they provide a quote for fixed fees?

 

[willair]

You walk past those people that set up in the shops,from various companies for tax this time of year,and they may get it right,but then again for a few hundred dollars extra why take the risk,i think we pay about 350 per hour and for someone who has had to study for years
and still study ,then the price you are paying is in line with most outhere..
imho..

 

[coastymike]

Terry

All three of those organisations require a degree or diploma to obtain membership to my knowledge. Sorry to be pedantic but being a registered tax agent isnt as simple as working for ITP for 8 years. Not now.