With tax time here, it is worth thinking about who you will choose to prepare your income tax return.
For straightforward returns involving only salary and relevant deductions, you may well get a good job done at your local shopping centre.
However, income tax laws never seem to stop increasing in complexity. By getting an accountant who is a member of the Institute of Chartered Accounts, Certified Practicing Accountants (CPA) Australia or the National Institute of Accountants to prepare your return, you will not only make sure that any complex points in your income tax affairs are properly dealt with, but you will also create a relationship for ongoing advice about tax matters.
The accountants referred to above will have the initials CA, CPA or NIA behind their names. Most should give you a quote to prepare your income tax return; check this against the shopping centre fee to find what extra cost may be involved.
This will not only ensure that any complicated matters in your return are properly dealt with, but give you the opportunity to ask questions about tax planning for the coming year.
Having established a relationship, you have someone you can always call up about tax related problems during the year. As a wage earner you may have questions about potential work deductions or salary sacrifice. As an investor you may want to discuss negative gearing of property or taxation treatment of share trading or what person or entity is most appropriate for these.
If you are in business or going into business, you are in a taxation minefield without professional advice. You need an ongoing relationship with an accountant who understands your situation. Even the basic question of what entity is likely to be best for your business – sole trader, partnership, company or trust – should be worked out in conjunction with your accountant.
It is potentially a big step and unknown expense for a business to commit to an accountant for the first time. Most firms will quote their charge out rates for different levels of staff, and may even quote a flat fee for the first year. However my advice is to discuss this with friends or acquaintances, find whom they recommend, their fee levels, etc, and then follow up on their recommendations.
Most accountants are not financial planners, which requires separate licensing. They are not allowed to advise on specific investments or investment strategy, but can work with your financial planner to look at taxation implications. For instance, if you decide a Self Managed Super Fund is appropriate, your accountant will work with you to set up the fund and conduct its operations in accordance with tax law.
Your basic requirement is to get value for money. A good accountant will deliver this.
This article was prepared by Casey Sackley of John Woodward Chartered Accountants. If you would like to discuss youur tax needs with Casey you can contact her on 07 4033 1666 or jwcairns@bigpond.net.au.
