Tax time approaches… Is your accountant fit for purpose?
May 29th, 2014 • No comments
The tax system is a very complex and continuously evolving area. Legislation is constantly changing and compliance is becoming increasingly stringent – it’s impossible for one person to know it all!
For this reason, it’s important that we as property investors, ensure our accountant has expertise in the area of property investment tax. Ideally, they should be property investors themselves.
Without the right person on the job, you risk losing potentially thousands in tax savings every year in the property portions of your returns.
A skilled property investment accountant should assist you with:
· Creating an investment strategy to minimise tax
· Structuring your portfolio so as to maximise returns whilst protecting your assets
· Ensuring you have claimed all the deductions you and your investments are legally entitled to
Whether you have an accountant currently, or are looking to change, it’s important to consider their suitability to your investment situation and goals.
Here’s the selection checklist I used when choosing my property accountants:
Are they registered and qualified? Tax accountants should beregistered at the online tax and BAS agent register. Ideally, they will be qualified to Chartered Accountant level – the most highly regarded in the industry. You can search on the Institute of Chartered Accountants website for a CA in your area who specialises in property tax. If they are a CA or member of another professional body, such as the Institute of Certified Practicing Accountants Australia or the Institute of Public Accountants, then they have to meet the standards of that association and you have the right to complain to the association if you’re not happy with their service.
Do they have sufficient experience? Your accountant should have at least three years’ experience working with investment property tax and ideally should be a property investor themselves. Your assets and position will be better maintained by a likeminded investor, qualified for the job.
Are they easy to communicate with? Investing can be a fast paced game at times so it’s important to be able to reach your accountant via phone and email if you have any questions or concerns. Selecting an accountant that takes forever to get back to you may result in you missing a deal or taking risks by proceeding ahead without your queries checked. Ask them what their response time is to client queries.
You should also feel comfortable asking questions and they should dedicate an appropriate amount of time to addressing your questions and concerns. Ideally look for someone pro-active – will they actively suggest ideas to reduce your tax and increase your returns?
What is the service capability of the team? It’s useful if you can also get accounting advice and services from other specialists within the same accounting firm, such as SMSF and financial and investment advice. To provide investment advice, an accountant must have an Australian Financial Services Licence.
Consider their fee structure? An obvious question, butit’s important you’re clear on what and how your accountant charges from the outset.Typically, fees are charged at an hourly rate and they will bill for their time for one-to-one appointments, phone calls and emails.
Choosing carefully using the above criteria will help you align with a professional who should be a positive and guiding advisor on your property journey.
A quality accountant will be worth their weight in gold as your portfolio grows – so avoid judging too heavily on cost. Investing in a good accountant will deliver solid returns year after year!
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