Recommendation for Software for Doing Personal Taxes

• 

  ihbh on 16/09/2022 - 08:26

  +4

  Why don't you use the ATO software which prefills as much as possible supplemented with a spreadsheet - e.g. for investment properties, trusts?

  • 

    bin555 on 16/09/2022 - 08:30

    Does it prefill depreciation items.
    To me there are two things the accountant is adding value:
    - tracking of depreciation
    - advice

    Also last time I saw from my friend on how they work out whether you can claim items or depreciate it. ATO have lots of docs which provide the guidance and that just look at that for reference.

    Obviously no software can replace advice but most of the years are straightforward and don't need any advice.

    • 

      Seraphin7 on 16/09/2022 - 09:24

      +2

      In all seriousness, as an individual taxpayer, you don't need specialised software to run depreciation. You simply look up the depreciation schedules the ATO has published and apply the appropriate depreciation rate to your asset. It can more than adequately be done on a spreadsheet, or even just pen and paper.

      How many assets are you depreciating? For most people it's going to be little more than a laptop and mobile phone.

      • 

        bin555 on 16/09/2022 - 11:23

        -1

        Thanks.
        Laptop and phone are not that bad since you just depreciate over 2 years. For property there are some items that need to be depreciated over 10 years.

        • 

          Seraphin7 on 16/09/2022 - 12:03

          @bin555: So one is 50% a year; the other 10% a year?

        • 

          CheapskateQueen on 16/09/2022 - 22:05

          @bin555: ato has depreciation calculator on its website

          • 

            Benno007 on 16/09/2022 - 22:23

            @CheapskateQueen: I tried using their calculator for something with an effective life of 4 years, and it calculated 15 years for me… so I just went back to my accounting textbooks lol

    • 

      ihbh on 16/09/2022 - 09:37

      Does it prefill depreciation items

      No, where would it get this info from vs share info from brokers; interest info from banks.

      Advice - the ATO has detailed info on its website or pdf (or even printed docs previously) updated each year

      ---

      In a spreadsheet, depreciation calc set out as follows: total cost | opening | acquisition date | rate % | type | private portion | closing | total depn claim, etc.Closing is next year's opening.

      If you don't know, maybe use agents for two years and get their full working documents.

    • 

      pharkurnell on 16/09/2022 - 10:57

      +1

      To me there are two things the accountant is adding value:
      - tracking of depreciation
      - advice

      then go to an accountant.

    • 

      FairDeal on 17/09/2022 - 10:16

      Yes the ATO's online does calculate your depreciation AND track it year on year.

      Everything you described your accountants software doing is done by ATOs software.

      Accountants must be laughing all the way to the bank because the fact is for 90% of Australians they know they are no longer needed.

      And before anyone says that their worth using for advice this is not true because the linked help in the ATO software is excellent plus tax laws are now such theirs no big holes where you can get out of paying the required tax only a few small choices eg. You can choose between two depreciation types for your assets…. Again this is all explained in the sware.

      Took me about 5 years to convince my girlfriend to stop using an accountant and start using the ATO software and now each year while doing her tax she says "I can't believe how easy this is" and "I wished I swapped sooner". Btw she also found the accountant had been doing several things wrong by using the ATO software.

    • 

      hiancc on 29/09/2022 - 13:01

      Yes, you can load set up and maintain assets to calculate and load cap allow. I had an investment property for years. Never used a tax agent.

• 

  GordonD on 16/09/2022 - 08:58

  This an opportunity for someone on the internet.

  It would work well if it could learn from what the ATO allows and doesn't allow. But I guess they aren't going to release that sort of information, even de-identified.

  • 

    freefall101 on 16/09/2022 - 11:41

    The ATO methodology is pretty simple, it compares what you're deducting to what other people in a similar role does and what you've claimed in previous years. It also looks at dollar amounts. So if you're a childcare worker and trying to claim a cement mixer, or claiming $30k worth of travel, those are obvious red flags. There's no universal allow and doesn't allow set of rules. It also changes regularly, so any data collection would be quickly out of date.

    Best way to deal with the ATO is keep your receipts and be honest. If you're not sure if something is deductible, look at their website. If it's too complicated, see an accountant.

• 

  Rob-4x4 on 16/09/2022 - 08:59

  Pay a qualified accountant who knows the current tax laws. They can then advise you what you can lawfully claim rather than you guessing …

  • 

    djsweet on 16/09/2022 - 09:03

    There is something wrong with the tax system if you have to guess if something is allowed or not.

    • 

      Rob-4x4 on 16/09/2022 - 09:04

      Yup … exactly

    • 

      Seraphin7 on 16/09/2022 - 09:30

      +3

      Indeed. It's the trouble with having all of these "allowable deductions" that have rusted on to the system over the years, usually through creative accounting.

      This has usually come about by "creative" applications of the rule that (rightly) allows you to deduct expenses incurred directly in the earning of income (ironically even though the most obvious, the costs of getting to and from work, have been ruled out), but has been stretched to cover items most people would see as ridiculous. But then people see this going on and don't want to miss out so more and more ridiculous items are claimed/attempted to be claimed.

      For example, I'm aware of someone who works in marketing who claims a deduction for their Foxtel subscription on the basis that they "have to watch the ads" as part of their job.

      • 

        Crow K on 16/09/2022 - 10:14

        +1

        Yeah, people like in your marketing example say all sorts of things like that. To themselves, at the time.

        The question is whether they stand up to scrutiny if you get audited/checked by the ATO later on ("Yes I claim 100% of my Foxtel expense because I need to research ads and I only watch the ads by flipping around and deliberately avoiding the main content. What's that, you can get logs of my viewing activity? Well, looks like I've lied on a government form and I'm caught").

        A self-reporting system that 'lets' you claim deductions for whatever you want and you're OK as long as no one checks on you isn't a fault of the system, it's a fault of the users. This is why the ATO has the power to issue assessments for what it says your income is [and it's down to you to prove otherwise].

        • 

          Seraphin7 on 16/09/2022 - 10:30

          @Crow K: I think we're ultimately saying the same thing.

          The question then becomes how to correct for it?

          For example, do we say to everyone you get a standard deduction of "x%" of your salary and then after that only individual items with a cost greater than "$y" can be applied for to get a deduction, but with that deduction being subject to explicit review and approval by the ATO?

          Not saying the above simplified model is perfect, but it would (1) streamline the system enormously and (2) get rid of all the "can I just squeeze this one in" deductions that actually are a significant cause of taxpayers' gripes.

          • 

            Crow K on 16/09/2022 - 10:34

            +1

            @Seraphin7: Yes, I agree. I'm more saying "the tax system is nuts, people claim all sorts of junk" isn't a rebuke of the tax system, it's just acknowledging there's loose units out there who'll do anything they want if they feel there aren't consequences.

            As for your suggested alternative (which seems like the American model), no, I wouldn't bother. It works for them (with its own pros and cons), but it shifts a lot of the 'work' onto the ATO. And then if the ATO accidentally approves something that they shouldn't have, well, you're basically home free. All the risk of a dodgy claim is now on their side of the ledger ("They'll either say NO or I'll get something I shouldn't, doesn't hurt to ask").

            Our model is fine, really - it can be exploited by dishonest people, but dishonest people are documenting their crimes and haven't got a legitimate defense when they're caught. We don't need to second guess everyone's tax return preparation for the same reason we don't need extra police to wait by footpaths to prevent jaywalkers from attempting to cross.

            Make the rules public knowledge, punish people who are caught not complying. Simples.

• 

  DingoBilly on 16/09/2022 - 09:34

  I do it all manually myself, and it's pretty straight-forward.

  The depreciation calculators are pretty simple and store the information over multiple years so you don't have to think too much. Most of the information is pre-populated already within the tax form as well so you just have to hunt down the stuff that the ATO doesn't already receive…

  Not sure what sort of software you'd be looking at as ultimately you'd still need to manually verify it all anyway.

• 

  subywagon on 16/09/2022 - 09:44

  +1

  Photoshop always serves me well.

  • 

    AndyC1 on 16/09/2022 - 09:54

    I prefer Krita as it's cheaper and can open PSD files.

    • 

      subywagon on 16/09/2022 - 09:57

      +1

      Who pays for Photoshop?

• 

  netjock on 16/09/2022 - 10:26

  If you got investment properties you should have a depreciation schedule done by experts. Think those reports a few hundred dollars.

• 

  freefall101 on 16/09/2022 - 11:34

  I sat with accountant saw the process in detail. They obviously use a commercial software which does following:

  pull info from ATO automatically
  prepopulate from previous return for things that are depreciation over few years.

  Yes, the ATO's website does this. Best way is to learn by doing, sit down and try do your own taxes before going to the accountant one year.

  It's also pretty easy to open up last years return and make sure everything rolled over correctly.

  • 

    bin555 on 16/09/2022 - 11:43

    Thanks for advice.

• 

  TimmyTims on 16/09/2022 - 12:45

  +2

  If you use the ATO depreciation tool, it auto-fills the info for future years.
  I also use the ATO app to track deductable purchases. Take a pic of the receipt, fill out the info and come tax time, you can load all of it into your return with a press of a few buttons

  • 

    bin555 on 16/09/2022 - 17:40

    Thanks for the tip

• 

  bin555 on 16/09/2022 - 17:41

  Thanks a lot for everyone's feedback.
  It seems ATO tool or manually is the only way to go and no software as such exists.
  I guess there is software in industry which is probably only worthwhile for professional accountants.

• 

  Lukeeeee on 17/09/2022 - 08:49

  I use etax.com.au which (not the ATOs e-tax) is a website and they have accountants who do a check before you submit the final return.. you can ask questions and they’ll pick up any issues. Like $80-100 per year, more if they need to review capital gains etc.. but still pretty cheap. It pre-fills ATO data (they become your tax agent) and you can easily copy forward last years stuff as well. It’s not perfect but suits for pretty simple stuff.

  • 

    bin555 on 17/09/2022 - 09:20

    Thanks