The more you have going on financially, the wiser it is to use an accountant to prepare and lodge your tax.
Let’s face it, the simple days of being a fresh faced teenager with your first job and having to remember only to tick a box to claim the tax free threshold, are long gone.
If you are an experienced property investor with multiple assets, or even just a first timer, tax time is now more complicated.
Here are some compelling reasons to engage a tax professional.
If accountants cost the same as say, tradies, forking over your hard earned cash would be less of a no-brainer.
But they don’t. A tax return prepared by a professional could set you back as little as $75 (very basic service), but in most cases, they shouldn’t cost more than a few hundred bucks; depending on who you engage and how much work is involved in combing through your finances.
The money you will get back in your return (or save on your bill) should cover the accountant’s fees multiple times over.
If someone told you there was a professional service out there that costs a few hundred a year and will make you thousands of dollars back, you’d want to know where to sign up, right?
And if you still had any doubts, their fees are deductible in full from next year’s tax.
There’s a reason accounting students spend at least three years at university with their heads immersed in complex numbers; it takes hard work and serious smarts to get your head around this knowledge field. They do the hard yards so you don’t have to.
The following years of experience enable them to make some brilliant deductions!
They know all the tips and tricks that would never have occurred to the rest of us and will maximise your return.
Every year the Federal Government likes to announce various initiatives, rule changes, grants and schemes when the Treasurer hands down the budget. Any of the changes that pass muster in parliament end up filtering through in time for July 1 the next year (14 months after may budget).
Unless you’re a lawyer, accountant or administrative genius with endless time on their hands to pore over budget papers filled with political mumbo jumbo, it’s nice to know your accountant will be well and truly across any changes relevant to your situation.
Recent examples have seen investors no longer able to claim depreciation on plant and equipment that existed at their properties before they purchased them; and the end of claiming travel expenses for property inspections against rental income.
Both saw numerous investors caught out. No doubt these guys were doing their own taxes!
Changes that target investors are likely to continue as the government looks to encourage owner occupiers back into the property market and lessen the exposure of the economy to speculative investors, so keep checking in with your tax agent!
Do the right thing
The tax system can be complex and fraught with confusion, which can translate into considerable penalties if you don’t do the right thing. An accountant will make sure to keep you on the right side of the law and can bring you reassurance when you have doubts over what you can and can’t claim.
That said, you are always accountable for the accuracy of your claim- that’s why you have to sign off on a return prepared by an accountant declaring all the information is correct.
But the ATO is less likely to come down hard on you in the case of a mistake if you can show that you provided the correct information to your accountant.
If you’re more procrastinator than proactive and are always running out of time to get your tax lodged, using an accountant means you’ve got up to an extra seven months up your sleeve; while an individual’s tax deadline is 31 October, accountants can lodge your return right up until the following May in some cases. They are also easily able to amend mistakes made in previous years’ returns and have a direct line of communication to the tax office.
If you haven’t already got an accountant you trust, in your team of experts, we’re happy to introduce you to ours!