Enough Time To… File Tax

Tax Man

Getting Someone Else To Do It

For at least the last decade, we have used an accountant/tax agent to file our tax returns.

Back when we started, filing tax was a hassle and not something we wanted to spend our time on. The old carbon copy forms seemed like mini-novels to be written, and took hours. Instead, once a year we would trek to the accountant to spend a pleasant hour chatting and catching up. Somewhere in there, she would ask a few questions then suddenly our tax was done. A few years ago, she left (in hindsight, it appears she actually retired early. As in FIRE. If only I’d known, or she had spoken of her plans back then!) Since she left, the experience has not been the same. The new accountant/tax agent is nice enough, however we spend the better part of an hour sitting in silence, answering the odd question. And this year I noticed a “pre-tax assessment” sitting on her desk when we walked in. A family member who completed their tax online through the portal this year had mentioned to me how easy it was – basically everything was pre-filled for them. As I watched our accountant simply tick off items on the pre-assessment list I was a little taken aback. Is this really what we are paying for?

The Results

This year I had accidentally managed to gain myself a HECS debt for a single subject (I forgot to pay upfront by the due date), and then I obviously neglected to tell my employer I was so encumbered, which means it wasn’t coming out in my tax. The upshot is…

Mr. ETT Receives $626.24 Tax Refund
Mr. ETT Receives $626.24 Tax Refund
Mrs. ETT Owes $652 Tax
Mrs. ETT Owes $652 Tax

we owe the Government $25.76.

That’s OK, it was my stuff-up and I don’t mind paying my fair taxes. However, to complete both of our returns, it cost $310. Ouch! For the first time in a long time, I am looking at the value for money in those fees. It isn’t just because we have to pay tax and ended up with a negative return – even if we had received a return, it would have been in the order of $1,100 all up. That means we are taking a 25% hit to our return each year. That’s more than many credit card rates!

A Change Is Needed

Our tax affairs are simple. We are both wage earners, employed by The Man, so we don’t have anything complex. Investments are minimal, and so far have been set and forget (although that will be changing). I am organised when it comes to collecting the paperwork to prepare for tax. Throughout the year whenever we receive something that may be tax related we place it in a drawer in the  kitchen. It’s then just a matter of pulling it out and sorting it at tax time.

I think the writing is in the wall for our accountant. If we were day traders, or owned investment properties, or our own business, it might be different. However, it appears suddenly clear that my personal rate is much better than $310/45 minutes, and this is one instance where I would rather spend the time than the money. Next year I will definitely investigate the MyTax portal, however when utilising functionality like this, I am always on guard, because the scammers are everywhere.

Do you do your own tax? Why or why not?

Time well spent this trip…
Book: Andromeda Spaceways Inflight Magazine Issue #64
Comic: Pathfinder Goblins
Tabletop RPG: Pathfinder Eberron
Game (Mr. ETT): World of Tanks
Mission: HTML/CSS

9 thoughts on “Enough Time To… File Tax

  1. I completely agree with you Mrs ETT, if you’re a simple wage earner with no business, no investment property, no complicated work deductions or shares then it isn’t worth it for an accountant. If you’re willing to work it out yourself, then why not? Save yourself some money.

    Tristan

  2. I’ve been doing my personal tax return myself for years and usually end up with a refund even if it’s not huge. Better than nothing and it shows that I’m paying close to the right amount of PAYG tax during the year. My suggestion is to read the online help information that the ATO publish and get yourself up to speed on what you can and can’t claim for and go for it yourself. If you need help or advice, just ring them and ask. If you can turn that $25 payment into a $280 refund, you’re winning.

    • I hadn’t thought about it that way – that the closer to zero we get, the more accurate tax we are paying. You are right – any refund is better than payment (and perhaps that will encourage me next time to remember to pay before the due date!).

  3. It’s like our stories are the same. I recently started to do my taxes again when my tax accountant retired.

    At one point my tax situation became more complex than I was comfortable completing and outsourced it. However, it became easier again and coincided with the tax accountants retirement.

    This sounds so nerdy but I love being able to do my taxes. I know where every dollar goes and appreciate all the ins and outs of the tax form now. It is well worth the hour or two I spend each year filing.

    • Hey MSM, welcome! Thanks for your comment – it is good to know that it should only take an hour or two investment of time. And when it comes to numbers (including taxes), I don’t think you are nerdy at all πŸ˜‰

  4. I used to do my own taxes through E-Tax until I moved out of my PPOR in Sydney, thus turning it into an investment property. I didn’t know how to get that done myself so I started using an accountant.

    I sold the property late last year, so this will be my final tax return that has anything to do with that property on it….

    Will I go back to E-Tax? I don’t know. It makes sense really. But I look at my statements from my investments and they confuse me. We’ll see though. Maybe I just need a bit of self-education.

  5. Definitely ditch the accountant. Surprisingly you can do shares, depreciation and most things for a basic business yourself too. Especially if you maintain good records along the way. It’s not that hard to do or to learn to do and you can call the ATO if you get stuck along the way. They are surprisingly helpful once you get the right person. Running a registered company is the point at which I think you need an accountant in my opinion, mainly because of the penalties if you get it wrong get more serious! Just did my own tax this week. Literally all done, 4 returns within 1.5hrs. Mine, wife’s and two trusts. the numbers were already to go in spreadsheets I keep up over the year. No problems and a big saving by doing it myself. Definitely the way to go.

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