I've got a 1 year old IP and getting ready for tax time.
So far used a known (through a work colleague) accountant (charged around $100 for PAYG tax return) but now in the market due to negative gearing on IP.
As few companies charge per hour like $350.
Just wanted to ask your personal opinion please - is it worth going for these companies?
Deprecation schedules
You don't need to pay extra for account for deprecation schedules every year, you can get professional get one done that last for 10 years by going through the property.
Don't forget the time travel cost to have stuff you've bought in the subsequent years added onto that same report (before it's generated in the first place).
Yeah but that doesn't cost that much to amend few things.
These days accountant job getting easier as most reports are well prepared. Most IP related expenses comes through real estate EOFY reports.
Perhaps if IP is a self manage and you not well organized, accountants can charge more.
I went from city based accountant to one from suburbs, price went down from $400 to $200, not much change in tax return. Its good to shop around as well.
There are accountants change by hour just to get a small advice.
Yeah but that doesn't cost that much to amend few things.
Sure, this is the "haircuts cost $5 and it should only take about half an hour to fix my car" line of thought, isn't it?
"I need someone to do this for me, I haven't invested the time or skills to do it myself but I reckon it's easy and that also means it's cheap"
Definitely a realistic attitude to have.
@Crow K: I know how accounting works, there is a big difference between clients with tons of invoices, unorganized documents vs everything there to just filled in. Its not like getting $5 hair cut vs $50. These days EOFY reports, deprecation schedules are brilliant. PAYG and share info pre filled not like 10 years ago. All account need to do is go through thoroughly.
@boomramada: "Someone gave me this piece of paper 7 years back with all my depreciation on it, now I've gotten rid of a few things and I've bought some more with their own costs and depreciation rates a few different times since, just drop those in there as well, yeah? It's all pretty simple, I expect there's a computer that does it for ya, in fact, I feel like you really shouldn't be charging much at all if we're being honest, you're barely doing any work but do make sure you go through thoroughly when you do it, I want you to use your professional knowledge on tax law to make sure I'm getting the best results"
The reason people laugh at you behind your back is your $5 haircut is crooked. (But it suits you).
Even if you took every currency in the world all the money in the world and tried to create time travel, it still wouldn't be enough. Better off just paying the accountant fee.
@garetz: Yeah, my approach is "tax is the single most expensive thing in my life, and getting it right on my tax return (which is a legal document) with the best result is important to me.. I think I'll pay a professional their asking rate to make sure they get it right, and then trust in their judgement".
Probably the same reason I don't try to lowball or second guess my doctor or dentist. I'd rather get the right result.
We charge nearly $400 for IP return. Definitely more work involved - plus advice.
What companies?
I say check your local/boutique firms.
It may just be worth learning and figuring it out for yourself.
I've been doing my own tax returns for IPs and while it takes a bit longer once you do it a few times it's pretty easy. Most bills are electronic so they're easy to track, and you can just compare one year's tax return against the last to spot if there's any major things you've missed or maybe have mis-reported.
Check out https://www.leeandassociates.com.au (and in particular their Google reviews)
I used to see them while I was in Brisbane, and continue to use their services after relocating to Canberra (for the past 3 years). You can have a free consult to get an idea of the fees associated. Rough prices here:
http://www.leeandassociates.com.au/terms-and-conditions/
I track all expenses related to the IP, along with the EOFY summary by the agency, send them through a spreadsheet and they take care of everything, very knowledgable and super efficient, and will give great tax advice for IPs
I just went on our Facebook community group went with one that was highly rated. She charged us $240 for 2 people and came to our place so we didn't have to lug the kids around. We had an IP too, so I guess we got a pretty good deal
Former accountant here, it's because when you're in the flow of it a PAYG tax return takes less than 10 minutes to knock out. Over a month or two period in the busiest part of the year I'd generally do about 200-300 tax returns, most of them just being knocked out one after another with my brain switched onto autopilot. You'd be surprised how most tax returns are basically the same.
I was still billing at $400 an hour, it's just that 10 minutes of that doesn't cost much (well, 12, usually billed in 6 minute blocks). A complicated, multi-country/residency with investments, properties, unique tax law requirements, etc might take about 3-4 hours. Those billed for a fair bit more because I might need half an hour from a tax partner to clarify some details.
Deprecation schedules, trust structures, IP related expenses etc mean more work and having to pay attention to more specific rulings.
PAYG is very easy, a one time visit and learning is enough to maximise your benefits.