How to find a good accountant?
Most people just use the cheapest one they can find, this is a grievous error in my experience as most of the time cheap tax advice turns out to be the most expensive decision you could make.
OK, you read on Facebook or your friend tells you to use Mr/Ms X who only charges $100 and got them “loads” back, that may well be the case but this does not mean this is the right accountant for you or that your friend got everything they were entitled to.
If you pay anyone only $100 in this day and age their only concern is to get you in and out of their office as quickly as possible, the moment your taxes become in anyway complex they don’t want to hear about it. Of course they are not going to say this directly to you, what you will get is poor advice on what you can and cannot claim and zero advice on future Tax Planning.
If you miss out on $1,000 worth of deductions every year by failing to pay $200-300 extra to get the proper advice, it hardly makes good financial sense.
It is also worth noting that ultimately YOU are responsible for what goes into your tax return so whilst poor advice will be taken into account if there are problems with your returns, it will not exempt you from paying what you should have in the first place.
So what should you look out for?
They should be registered with the Tax Practitioners Board
The tax practitioners board has been set up by the Australian government to regulate those that provide tax advice. They check that anyone providing tax advice has the required qualifications and experience to do so. They also ensure that correct level of professional indemnity insurance is maintained and provide a complaints service should you have problems down the line. You can check online whether someone is registered or not at www.tpb.gov.au .
They should have experience with someone in your situation.
If you are a bricklayer, it is worth asking the accountant how many bricklayers does he /she currently do returns for. Similarly, if you have an overseas property you should ask the prospective accountant how many clients has he got that have overseas property and what deductions can be claimed in relation to them.
Just because your friend is single, a carpenter and got $1000 refund it doesn’t mean his accountant is right for a married man who is a computer engineer with a family and an overseas property.
When “No” means “I don’t know”
The tax system is complex and no accountant is completely across all the rules and changes to those rules from year to year. Sometimes either due to ignorance or not being up to date with the latest changes of a particular area of tax law an accountant may tell you that you cannot claim for a certain deduction.
It is always a good idea to challenge this kind of advice if you suspect that it may not be the case. You may have heard of a friend claiming for this deduction or read it online. In these circumstances send the accountant the information that you have on it and challenge their view. They should be able to demonstrate why you can or cannot claim something by referring you to the relevant guidelines.
Sometimes you may need to be persistent with this so don’t give up until you are satisfied with the answer.
Ask about the future, particularly with investments.
Wealthy people spend a lot of money on this kind of advice and with good reason. This becomes very important when you hold investments over a number of years as taxes such as capital gains tax can be minimised with proper tax planning. If you have any investments such as an investment property it is vital to get advice about the most tax efficient way to dispose of the asset BEFORE you sell it. Once its sold the horse has bolted so to speak.
Ideally you should get this advice before you make any long term financial decisions. There are a lot of companies spruiking SMSFs at the moment for example but unless these are setup properly they could prove to be a very costly decision as in some circumstances the SMSF could end up being taxed heavily if you leave the country in years to come.
Finally don't be afraid to ask questions, after all that is what you are paying for.