Using an Accountant to Prepare Your Tax Return

Edit: all done, here's my outcome

Cost me $198, less the third or so I'll reclaim in tax next year, so around $130.

He generally agreed with most of my assessments, and actually advised increases in the work use proportioned to mobile phone and internet usage (which I'd admittedly been highly conservative in), though said my record keeping and accounting was reasonably good and going through an accountant isn't really a strict requirement in future. Also advised using different depreciation models for most expenses which bumped it up a little (diminishing value instead of prime). In the end, not really ahead or behind financially after their costs, but he had some reasonable pointers and I think it was worth doing. If my tax affairs become significantly more complicated I'd consider it again, but for now as a PAYE/PAYG employee and occasional sole trader there isn't much value in it for me.

If you're very confident in doing your tax returns you probably wouldn't get much out of it, but if you're in the "can I claim this", "how long do I depreciate this over", "what method should I use to depreciate this" camp going to a professional is probably good.

The company I used was very good, and his understanding was quite good, but there's just no point for me seen I pretty much do it all already.

Thank you for coming to my Ted talk


Original post

So, thought I'd get a bit of a consensus as to who uses an accountant and who manages their own tax returns, and why.

Historically I've always returned my own (personal tax as well as sole trader business, though I haven't operated that this year). I feel that the hard work is keeping track of things and collating receipts, and the data entry is the easy part.

Anyway, with a number of friends, colleagues etc. insisting they get much better results through accountants (and a bit of a shock at an initial tax debt as my previous employer made some errors in paying tax on a redundancy), I've organised for an accountant to go over my taxes. As a bit of a trial I've already partially completed my tax return and gotten the estimate to see how much, if any extra they net me. My tax return is relatively simple- just individual, with a handful of claims/deductions, and some usual WFH time, car use etc.

So- experiences, tips, advice?

I've heard that tax accountants are generally well informed on the hot topics or hit pieces for the ATO in a given FY, and will know how far to push the envelope with certain claims and deductions- whereas I tend to be relatively conservative with my claims and estimates as I do not care to be audited.

Edit: for those of you who assume I'm wanting to commit tax fraud by going to an accountant, stop being dumb. I think I do a reasonable job of my return, but I'm not so proud/ignorant to assume that there isn't something a professional may be able to find that I missed. If you choose to make a donation to the government by not being thorough in your return so be it, but that's not for me.

Comments

    • +3

      Amount you are getting back? :-( been a good decade since I have gotten a refund, usually it is a 10-20k bill. The only bright side is at least I had the money in my pocket most of the year rather than theirs.

    • +2

      LOL post of the thread!

    • Which is fraud. Hopefully you get audited or dobbed in one day.

  • +1

    simple tax return for about $120-150 is not bad. what they get you is investment properties, my investments cost me $250 each with H & R block, so the yearly accountant fee is quite high.

  • I do my own, am PAYG, own only one investment property, pretty simple process.

  • +1

    and will know how far to push the envelope with certain claims and deductions- whereas I tend to be relatively conservative with my claims and estimates as I do not care to be audited.

    Looks like your intention is to do some dodgy stuff.

  • +1

    I am a CA and if I wasn’t an accountant no way would I do my own tax return people think these days that you can be a lawyer a doctor from watching YouTube and just reading ATO guides. First it is piece of mind the chances of being audited is much higher because as accountants we have responsibilities what is in your tax return you do sign it but we have to make sure everything is correct.

    You sleep easy knowing that it is done properly if you have issues we will deal with the ATO to get things get sorted out. Paying $200 is worth the expense as it is tax deductible so you are paying peanuts at the end of the day.

    The barefoot investor lost all my respect he is just being a cheapskate screw that life if you are going to live like that.

    • I think people are fine to do it themselves, just depends on the complexity of their situation. I couldn't go back to doing it myself as I would leave too much on the table and would possibly cause issues (let alone stress myself out), so I can defiantly agree with the 'sleep easy' statement.

    • +2

      Paying $200 won't get a qualified accountant so you still risk a audit.

      Need to pay at least double that

      • -1

        Lol no you don't

        • +1

          For a decent qualified accountant you do

          If you want an audit you can pay 200

    • $200 is peanuts after the tax deduction?

      Expensive peanuts.

    • +2

      I could be a doctor or a lawyer if it was laid out as easily as the ATO website is.

    • Marketing pitch?

  • +2

    Mostly tax agents are useless and waste of money. I found them super lazy to respond and hardly provide any useful information.

    Tried couple of more experienced and found them arrogant and useless again.

    I found tax agents are helpful only in start of their career when they trying to capture clients.

  • +1

    I did my own until about 4 years ago when i got a new role that paid a fair bit more. Didn't have a mortgage (therefore offset account) at the time and savings rates were decent so i had a tax bill due to interest most years.

    I went to an accountant and he gave me plenty of deductions i could use for my role that i was oblivious to. If someone asks how - he asked me about my role then questions on top of that. Do you WFH? Do you travel for work? etc.
    Worth the money, at least once then if nothing changes use the same the next year as a template.

  • +1

    Personal tax? No, don't waste money. However if you have business or trade shares or crypto. Get one for sure

  • Used to do my own tax when I had the simple life (1 job/student, minimal deductions). Now I/we use a tax agent who also handles our business accounts so generally an hour or so to get my personal deductions together and send off to them.

    Our accountant has done an amazing job for us, I was hesitant to use them at first but they have provided great returns and ease of submission for all our accounts.

  • +1

    Primary production + PAYG. Accountant pays from themselves 10x over. Usually more.

  • +1

    Historically I've done it myself.
    Needed some specialist skills to deal with Capital Gains last year so hired an accountant.
    Will be doing my own again this year.
    Based on what I saw, while I may be down on claiming a few extra dollars on random tidbits each year, the accountant's fees would well and truly exceed any extra benefit that they might pull from my generally basic returns.

  • +2

    Firstly - you can be a Tax Agent and not an Accountant just like you can be an Accountant and not a Tax Agent. Most Tax Agents are also accountants but don't always go hand in hand…

    Really depends on what you are after - If it's purely transactional then (generally speaking) a tax agent is trained to interpret the law and assist in navigating that landscape.

    An Accountant on the other hand (in my opinion) should be like any other professional relationship, you need to have a rapport to get the most value out of what they're offering, not just their knowledge and skill. An Accountant should offer more than just tax advice, they should also be offering direction on your financial journey and a sounding board for decisions and dilemma's.

    If you're unsure if your affairs too simple to warrant a Tax Agent/Accountant, a good one will tell you that.

    PS - Whilst using an Accountant/Tax Agent to try and get a 'template' of your future tax obligations might seem logical, the law constantly changes and I would apply caution to this approach.

    My 2c anyway (As an Accountant/Tax Agent)

  • +2

    i went to H&R block once, and paid $120 for about 30 minutes. Mine was pretty straight forward (i did it myself previously and the only reason i did this time was to see if i could get any better.
    in the end, i got slightly more from doing it myself, without having to pay $120 ontop.

    however, the biggest issue i had was that i got a call a while later from a marketing company trying to sell me life insurance and i had to press hard to find out that they got my details from H&R block

    wasn't happy, and haven't been back since.

    • +2

      i got a call a while later from a marketing company trying to sell me life insurance and i had to press hard to find out that they got my details from H&R block

      And they wonder how tax professionals get a bad wrap >:(

  • Yeah, my relatives are tax professionals, so it's basically free. I'll give them a small gift but I repeatedly ask if they'd like anything specific to assist the business. Maybe there's less scrutiny submitting through tax professionals than doing it yourself, who knows.

  • I've seen this case from colleagues that justifies the use of an accountant:

    If you have company equity that vested over the last FY, you have to pay tax on the value of shares vested.
    Some colleagues did not have enough cash reserves to pay the tax, so they would have to sell some of the shares to cover it.
    Using an accountant can defer the payment due date several months, and the share price can increase a lot over the space of a few months for a growing company.

    So - paying $120 for an accountant can buy you time to earn more $$$ from the investments (if you don't have enough cash to pay the tax).

  • I paid $185 to a reputed tax professionals couple of years ago with a return of $585 not including their fees

  • i myself am in a bit of the same dilemna. i'm pretty confident i've been doing a good job myself but my partner thinks ive been ripping myself off (i dont agree), so im going to test that theory this year and am curious to see what the outcome is

    im going to do my tax return myself in etax (if thats what its still called) to get my estimated return but wont submit it, and then going to go to a tax agent to do it all anyway, as my tax is a bit more complicated this year but i think from my research i am still across everything. anyway ill be getting it done through the tax agent and will use it as a lesson for next year to guide me on whether to do it myself or not or to keep going back to a professional

  • +1

    I have always used an accountant, even though I worked at the Tax Office for nearly a decade. It's more about peace of mind for me.

    I want to make sure that my assumptions and deductions are correct, plus I feel like using an account reduces the likelihood of getting audited….or in the event that I am audited, I just point them to the accountant which will forward all the receipts on file.

    • +1 peace of mind.

  • This year I did myself it was easy. Saved myself few dollars.

  • +1

    The rule is if you don't have an investment property/shares, you can do it yourself.

    Otherwise I personally feel like getting an accountant do it for you it's well worth it.

  • Ever since I started working, I went to an accountant my family had been using for years prior. Been charged under $100 over the past few years and always got a decent return. Sure, I could do it myself, but I have various investments, started a side business this year, a range of deductions to claim. My accountant knows my situation well, provides some advice and updates me on certain changes that affect me.

  • +4

    'if you don't have an investment property/shares, you can do it yourself.'

    I have investment properties/shares/ETFs/managed funds, and I'm still thinking to do my own tax return, as I have done for many years - the only difference this year is a big CGT bill which I've already calculated

    Reason - I used an accountant a couple of times in previous years, and was frankly dismayed at the way they just sat and asked for my numbers, as I busily shuffled through all the paperwork I had prepared, before tap-tapping that number into their software, then asking me the next question and sat there waiting while I shuffled my papers again

    and at the end of an hour doing that - blithely said 'that'll be $150' … press button, print out the results …

    if I'm responsible for my numbers, I'd rather work through them myself

    but then again I've always been good at maths and spreadsheets, and I'm a detail guy so probably a rare case

    of course if you're none of the above, feel free to pony up the money honey to pay a professional to fill out your form for you.

    • This is what I'm worried about… I feel like I'm good with the numbers, and the record keeping is the real job.

      Hopefully they can give some pointers on a few things I'm not completely clear on (should I be logbooking and devaluing car as it's unlikely to lose much value which could incur me tax bill later, or should I use per km, should I use prime or diminishing value depreciation, should I establish a low value asset pool, etc.) but it'll be a learning experience either way

  • +3

    Have my own pty ltd co. And an abn for 20 years. Always done my own tax and used to submit tax returns for mates.

    Been asked to supply further information once and resupplied the same information again they went away and 6 months later wrote back saying… Next time provide further substantiation.

    Not trying to brag but I'm meticulous with receipts and scan them all monthly a habit from mystery shopping days.

    Don't use accounting software, just a spreadsheet. Not an accountant. Just got a book 101 legal ways to save on tax and the legislations are a good reference. If I make a mistake there is an opportunity for an amendment.

    • Are there any general obvious ones we should know about for just standard individual income tax lodges

  • I have been using the same accountant for the past 9 years, currently paying $1000 per year, for my personal and small business tax returns. Well worth the peace of mind.

    • Ithink if you have a business a tax accountant is a slice of heaven

  • Note that the accountant can get super creative with deductions but in the end it's you that is on the hook to pay the fine if it's not legal.

  • I hate paper receipts so i don't think i can claim anything anyway.

    I should get into the habit of keeping them but it is more work and idon't even know if it's tax deductible or not so cbb.

    I should see one but with this corona thing is it even possible to now.

    • The ATO app is actually decent- stores photos of receipts, you can prefill the deduction/amount, and it can prefill your tax return or sync to google drive.

      Electronic receipts from bunnings/JB are good too

  • +1

    I've tried an accountant a few times over the years when new investments and such started and I didn't know how to handle them. I've always felt I've wasted my money and it wasn't that hard to do myself. On the other hand, my wife paid last year and they saw that shed missed a return 10 years ago and dug up $1600 for her.

  • +1

    even with an IP and Shares I still dont use an accountant.

    all my incoming and outgoings are managed and tabulated at EOFY by the agent and provided to me in the correct ATO breakdowns

    I have had a quantity surveyor do a depreciation schedule, again all tabulated per financial year ready to copy/pasta into my return

    my shares are all automatically reported to the ATO and pre-filled

    my income is all automatically reported to the ATO and pre-filled

    my private health care is send to me as a tax statement, copy/pasta

    the ONLY place I could make money back is via deductions - which for a PAYG employee of a company is minimal

    why waste the money on an accountant for something so simple

    • +1

      'copy/pasta'

      that's amore !

  • +1

    Everyone should use an accountant to prepare their tax return.

    Source: Have a guess.

  • If you are late lodging then you get more time going through an accountant.

  • My father got me to do my own when I was 15 and it was pretty easy. The most complicated stuff I've had since is some WFH pre-covid and some crypto, but it was easy to figure out using the ATO website. If at some point there's anything complicated I'll use an accountant.

  • Any thoughts on how to calculate heating, cooling and general electricity expenses when working from home. I worked all last financial year from home and I am planning to claim part of my electricity and gas bills. Any advice?

    • This page explains it

      At the moment due to covid you can just use 80c/hour, but that is for everything, including decline in value of furniture etc. Otherwise there are a couple of ways of working out your expenses.

      • I don’t want to use the 80c shortcut method.

        My question is how can I work our portion of electricity and gas to claim on my tax.

        • +1

          https://www.ato.gov.au/Individuals/Income-and-deductions/Ded...

          Heating, cooling and lighting
          Work out the cost of your heating, cooling and lighting by using the:

          cost per unit of power used (your utility bill has this information)

          average units used per hour, which is the power consumption per kilowatt hour for each appliance, equipment or light used

          total annual hours used for work-related purposes by checking your record of hours worked or your diary.

          Note also this:

          You don't incur additional running expenses if other members of your household (who are not working from home) are in the same room as you while you are working from home.

          Example: working from a lounge room

          Lee works from her lounge room while her partner and three children watch television. Lee isn't incurring any additional costs for lighting, heating or cooling as a result of working in that room, so she can't claim a deduction for them.

  • +1

    Updated original post with outcome. Tl;dr no major change either way, a few slight changes.

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