What I learned by getting an accountant to do my tax return
I chose this article to show you a client point of view toward an Accountant.
I hope will be useful for you and can make you understand that an Accountant can make a difference to your business or to personal tax.
So let's read what she says...
Would you rather crawl into your winter hibernation hole than attempt to do your annual tax return? You’re not alone.
Until recently, doing my tax return was a soul-destroying administrative task that I held off, rushed through, and never did properly. Last year, however, my financial situation was complicated by a mix of salary and freelance income. I needed some help to get the best outcome possible, so I got an accountant to do it instead.
Getting the support of a professional helped me better understand how this whole tax return thing works. Importantly, tax time doesn’t fill me with the same sense of dread as it used to. Here’s what I found out.
#1 Getting an accountant is no biggie
Before engaging an accountant, I assumed that such services were only for rich people with money to burn. “Leave that with my accountant,” they would say, while sipping on brandy and reclining in leather armchairs. But accountants are available for everyone!
Getting an accountant is particularly useful if you can find someone who understands the industry you work in.
To find the right accountant for you, ask contacts who work in similar industries or check out the Chartered Accountants register online.
#2 You’ll pay for the privilege – but it’s money well spent
Of course, accountants don’t come for free! Expect to pay upwards each year for the service – a cost that you can claim as part of the next year’s tax return. If you’re working full time and a lot of your expenses are covered by your employer, it may be cheaper and easier to do it yourself using the MyTax tool on the Gov website.
If you’re like me, however – effectively running your own business – hiring an accountant may be worth the investment. What you should be aiming for is for the pain to be taken out of the administration work, and also be rewarded with a good return with minimal costs owed to the government.
Regardless of your situation, you’re not locked in to having an accountant every year, so it may be worth giving it a try.
#3 There’s still administration involved
An accountant isn’t going to magically do everything for you. The first time your accountant does your return, you’ll still need to find a lot of information yourself and send it through for collating.
This includes Pay As You Go (PAYG) summaries from salary or wage jobs, health insurance statements, bank interest earnings, donations over two dollars, income earned, expenses related to your income, and information on assets like trusts, rental property or foreign income.
Importantly, you must have proof of all expenses you’ve claimed in the form of receipts, and hold on to them for the next five years in case you get audited. There is a capital allowance that you can claim without this substantiation, but ensure it satisfies the capital allowance rules.
#4 ‘Inspiration’ can count as a tax write-off
One area that tends to confuse people at tax time is understanding what expenses you can claim. In a salary job, it’s likely that your employer covers most of your expenses via an internal reimbursement scheme. There may however still be outstanding costs you can claim.
Do you subscribe to an industry magazine? Wear a uniform? Have travel expenses aside from getting to and from work each day? What may be a deduction in one role may not be a deduction for another, so getting the advice of an accountant in this area can be really helpful.
In assessing my own expenses, I discovered that the books I read, films I watched, and even some of the travel that inspired my writing could be claimed as part of my tax return. But before you start writing off your Narcos binge habit or booking flights to Bali, tread with caution: all costs must have a direct connection to your assessable income.
It’s likely that there’s a private use component (say you went to Bali on a holiday but wrote a review of a restaurant you visited one night), so what you claim will be a percentage rather than the whole cost.
It’s also worth noting that for things like travel and even TV-viewing, you’ll need to keep a detailed diary that provides information about the nature, date and duration of activity.
#5 You’re still accountable
If you’ve hired a good accountant, they should provide you with accurate advice and provide you with a stress-free experience.
But just because you’ve paid a professional, doesn’t mean you’re no longer liable. If your accountant has taken reasonable measures to ensure your tax return is correct, you’re responsible for any errors in your claim.
This is especially important when it comes to over-stating the expenses that you claim, or understating any assets or income that you receive. For this reason, ensure that you retain all your proof of expenses, and double and triple check all the numbers and information in your tax return when your accountant sends it through for checking.
The last thing you want from hiring an accountant is to have to pay extra money to the government.
(Reference - The cusp. https://apple.news/A7kfCg-fQRLKAeISoMOBShw)