[AMA] I'm an Accountant

bemybubble on 20/05/2016 - 15:30
Last edited 20/05/2016 - 15:31

Howdy OzB Community,

Starting to slow down come EOFY and thought it might be a good idea to do an AMA. I am a professional accountant in public practice for over 7 years.

Must do a disclaimer though that none of my responses are to be taken as advice and you should seek your own professional advice to best suit your own needs and I won't respond to personal situations.

Have seen a lot in the last 7 years, I do not have all the answers but my experience and development is furthered by your questions!

Introduce Yourself

closed Comments

  • harkoliar on 21/05/2016 - 19:14

    Hi OP,

    This will be my first year filing my tax returns with childcare as part of the mix.

    Any tips on what I need to watch out for?

    I nominated my wife in getting the family tax benefit A and childcare rebate. SO when I lodged my tax return, do I have just to fill in extra details regarding childcare rebate and family tax benefit or my wife has to do that bit?

    Thanks

    • bemybubble on 21/05/2016 - 22:30

      Child care and FTB are not taxable :) no need to report on your return

      • harkoliar on 22/05/2016 - 00:40

        Cheers thanks for the tip. One tiny less thing to worry about when filing taxes.

        • bemybubble on 22/05/2016 - 08:41

          You're pre fill will be able to pull most information if that helps too

  • Dr Cheapo on 21/05/2016 - 19:38

    Hi bemy!

    I've always been confused with the duration of employment before being able to claim tax deductions

    For example if I signed up to uber tomorrow would I be able to claim maintenance registration etc for the entire financial year?

    Also if one wanted to expand their possible work related tax deductions couldn't one begin multiple jobs in different industries to grow their definition of "deductions"?

    Thanks in advanced!!

    • bemybubble on 21/05/2016 - 20:58
      +1

      You would claim from the moment you generate the income. Can't have the cart before the horse.

      Yes your theory is correct. Multiple jobs can expand deduction horizons indeed

  • [Deactivated] on 21/05/2016 - 19:53

    1.
    When I was 18 I was audited. I hadn't claimed overseas share dividends (genuine mistake and ignorance).
    My older sister was audited about 4 years later.
    Are audits done randomly?

    2,
    What is the earliest someone can do their tax return? The ATO website just says 'soon'.

    3.
    Do YOU think accounting and accountants are boring?

    THANKS!

    • bemybubble on 21/05/2016 - 22:32

      Audits are completely random and targeted. ATO publish a hit list as to whom they are targeting. For example at the moment it's anyone in the construction industry and those who are subbys or employ subbys

      Once the financial year ends. Then you can do your tax.

      Accounting isn't boring. Accountants can be boring, until you get a few into them :P

  • nickster9999 on 21/05/2016 - 20:10

    Are there any maximum time periods that a company can pay an employee a "travel allowance"? Under ATO guidelines, the daily travel allowance for an employee travelling and working in the UK is $230/day. Is there a maximum period this can be paid?

  • goomsy on 21/05/2016 - 21:07

    Thanks for doing this AMA. Are you able to explain how salary packaging effects HECS?
    Im quite confused on how it works, a couple of my co workers have said that they had to repay thousands in HECS during tax time. Just dont want to get caught out.

    • bemybubble on 21/05/2016 - 22:33

      Remember that salary sacrifice is reducing your gross income in exchange for a benefit. So your reportable fringe benefits need to be factored in as had you have not sacrificed it would have been in your gross right?

      I see people in health get caught out all the time. Basically payroll should be all over it to make sure they take enough tax out for you so you don't get bitten

  • biltong2go on 21/05/2016 - 22:35

    Thanks for the AMA

    1. How often do you see audits?
    2. What is the most common trigger?
    3. When an audit occurs, do they happen FBI-style, breaking down the door, with a search warrant, taking any and all computers and paperwork on the premises?
    • bemybubble on 21/05/2016 - 22:49
      +1

      Ha. Love the questions

      I've been in public practice for over 7 years. Took me 6 years to see my first and I've since had 3 in total.

      Common triggers are exorbitant claims. I.e. ATO do benchmark deductions for certain industries. My clients SMSF was audited as his return on investment was above average for example.

      No FBI style audit. To be honest they are quite boring…most are what you would call a 'desktop audit' which are no longer on site.

      The key with auditors is this. They are watchdogs. Not bloodhounds

  • [Deactivated] on 21/05/2016 - 22:41

    I don't know if this has already been asked but how concerned are you that your job will be either fully or almost fully automated in the future? Additionally, if you weren't doing this what other career would you have likely pursued?

    • bemybubble on 22/05/2016 - 08:38

      Happy to answer. There will always be a position for us. I feel that individuals will more likely be streamed into automation rather than business (and the ATO are open about that). There will always be a need for advisory services …

      If I wasn't an accountant I feel I'd be in retail. I used to own a small business but my time wasn't dedicated enough. I have an entrpreneurial spirit so I would have let that guide me to my next job :)

  • AMLagonda on 21/05/2016 - 23:29

    I have a small business why do I get charged $900 for a tax return? Is that too much?

    Should I buy a fridge that the business needs before the end of tax time? can I claim that as part of the $20,000?

    • bemybubble on 22/05/2016 - 08:36

      Hard to say whether your being stung Too much as it depends on time spent on the job. Or they might have a minimum charge out rate…

      The 20k write off applies to those who fit the definition of a small business and use the simplified rules for depreciation. As to whether you should buy or not I can't answer. All I can say is that anyone should always buy on the basis of need rather than tax in all cases. Never the other way around

  • cowiie on 21/05/2016 - 23:44

    I have 5 rental properties that I self manage. I devote a lot of time and effort to look after the properties, collect rent, advertise when needed etc. Am I able to claim home office expenses related to this (e.g. computer, filing cabs, key safe, office furniture, electricity)?

    • bemybubble on 22/05/2016 - 08:33

      I can't comment on personal circumstances. However:

      Any expenses incurred in the course of generating income is a deduction and can be claimed. Home office expenses are deductible and the ATO have a good breakdown of what you can and can't claim. Generally the 45 cents per hour method is always easier but there are others. I'd caution around claiming items like water, rates and mortgage interest due to CGT exposure

      • cowiie on 22/05/2016 - 09:33

        That helped a lot. I'll just stick to depreciating assets.

  • amsaini15 on 21/05/2016 - 23:51

    I have a owner occupied house and I have built a granny flat at the back of it. When I sell the whole lot, will I get CGT exemption from the granny flat as well or do I need to pay tax on the profit for selling the granny flat? Thanks

    • bemybubble on 22/05/2016 - 08:31

      Sorry buddy I can't comment on your personal circumstances.

      What I can tell you is that property that generates an income is generally exposed to CGT. Other than that you will need to seek professional advice.

  • skywards on 22/05/2016 - 00:22

    Do you know any tax accountants that don't charge too much? Hubby and I have been using the same tax accountant for over 5 years and I've noticed that their service has gone down hill over the years. Last financial year they charged around $1530 for 4 properties, 2 personal tax returns and one sole trader small business.

    • bemybubble on 22/05/2016 - 08:28

      Skywards to be honest you would need to hunt around. If you don't feel you're getting value for money. One suggestion I made to another member on here is to try airtasker.

  • frostman on 22/05/2016 - 10:32

    If I'm an IT professional and I buy a 2TB HDD and some other computer items from Amazon. Can I still reduce my taxable income with the amounts?

    • bemybubble on 22/05/2016 - 11:26

      To claim a deduction you must demonstrate the connection between the item purchased and how it assists in generating your income.

      • frostman on 22/05/2016 - 12:26

        Well a hdd I need for my PC as I sometimes work from home

  • gstfree on 22/05/2016 - 10:53

    Business scenario:
    1. Some taxi receipt (tax invoice) does not have ABN# printed. This would not be an valid tax invoice. Given all taxi drivers are required to register GST and the taxi fare is less than $82.50, is GST shown on the taxi receipt claimable?

    1. If our consulting firm (vendor) enterains our clients, what's the practicalbe way to work out the non tax deductible amount?

    2. Some expats in Australia received RSU in 2015-2016, which was granted overseas. What's the practical way of ESS reporting according to your opinion?

  • Marmaduke on 22/05/2016 - 11:30

    My wife is a yank and they have to file US taxes each year plus do foreign bank account filing. Do you have any advice on local accountants that can assist with that? Should any AU based accountant be familiar or would you suggest getting a specialist… Thanks in advance!

  • [Deactivated] on 22/05/2016 - 11:39

    What fulfills you in your job?
    Finishing a return?

  • [Deactivated] on 22/05/2016 - 12:31

    G'day OP.
    Just wondering if you've ever done numbers for small businesses and where are the places they seem to 'leak' the most money?
    Toughest thing in Australia is obviously trying to keep wage costs at a sustainable percentage and I'm wondering if there was a magic number that you'd consider (percentage wise) is what small businesses should strive for with wage costs?
    25% of turnover? 30% of turnover? Less than 25%?
    Thanks OP!

  • The Gent on 22/05/2016 - 12:48

    Do you need to fill in a tax return if you have made nothing all year?

    No wages, no benefits, nothing.

  • dann on 22/05/2016 - 12:58

    Hi, thanks for doing this. I left my employer in January, however have spent some money entering the industries yearly awards. The entry relates to work done at my former place of work, however I made the entry some months after leaving them in January. Is the cost of entering these awards tax deductible?

  • bemybubble on 22/05/2016 - 13:08
    +1

    Sorry guys that's all for this AMA. thanks again to all that participated and appreciate all queries pitched.

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