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JaimeM

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« on: July 26, 2009, 10:10:16 pm »

Every year I wrestle with the same dilemma, am I paying to much to have my Tax returns prepared, I'm a solo photographer business in partnership with my wife (I'm not incorporated) at the moment it's costing me on average about $2,300.00 each year, I'm happy with the work, but I feel because they are a large accounting company,  I'm paying extra for their overhaed, newsletters and stuff I don't need or won't.

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Josh-H

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« Reply #1 on: July 26, 2009, 10:27:47 pm »

Quote from: JaimeM
Every year I wrestle with the same dilemma, am I paying to much to have my Tax returns prepared, I'm a solo photographer business in partnership with my wife (I'm not incorporated) at the moment it's costing me on average about $2,300.00 each year, I'm happy with the work, but I feel because they are a large accounting company,  I'm paying extra for their overhaed, newsletters and stuff I don't need or won't.


Well thats 3 x more than I pay in Oz to get my business tax done.
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JaimeM

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« Reply #2 on: July 26, 2009, 10:36:03 pm »

Quote from: Josh-H
Well thats 3 x more than I pay in Oz to get my business tax done.
Ok that sort of answers my question, mine would be more because of the partnership but I think it's time to go shopping.

Thanks
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Justan

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« Reply #3 on: July 27, 2009, 01:34:30 am »

I learned how to do bookkeeping years ago. In the US, partnerships are not that difficult to do for tax purposes.

I've used a product called Turbo Tax since about the early ‘90s. Is there anything similar in OZ?

If you want someone else to do the work for you, definitely shop a bit. How many hours does your CPA bill you for, for the work? It seems high to me, but I have no knowledge of tax requirements in your country.

JaimeM

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« Reply #4 on: July 27, 2009, 04:35:44 am »

Quote from: Justan
I learned how to do bookkeeping years ago. In the US, partnerships are not that difficult to do for tax purposes.

I've used a product called Turbo Tax since about the early ‘90s. Is there anything similar in OZ?

If you want someone else to do the work for you, definitely shop a bit. How many hours does your CPA bill you for, for the work? It seems high to me, but I have no knowledge of tax requirements in your country.
I do use a program here called Myob (Mind your own business) for doing the books, but I agree the partnership isn't that complicated and the funny thing is I don't know about in the US but every accountant I've ever used always have the vaguest invoices of anyone, nothing itemized, considering how they get on your case to have everything documented.
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Rob C

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« Reply #5 on: July 27, 2009, 04:57:49 am »

Quote from: JaimeM
I do use a program here called Myob (Mind your own business) for doing the books, but I agree the partnership isn't that complicated and the funny thing is I don't know about in the US but every accountant I've ever used always have the vaguest invoices of anyone, nothing itemized, considering how they get on your case to have everything documented.



That's simple: your invoice from them is to collect from you without too much information of how they arrive at the educated guess of what they would like from you; their work for you, on the other hand, is to make a presentation, on your behalf, to a very fussy client (Mr Taxman ) who's more than a little interested in the small print within your return. Hell, the accountant, primarily, is hiring you his legitimacy, not his time; the time you buy from him saves you tax you´d otherwise not know you could save, even if being a small business the figures are small.

It´s another example of the qualities of scale: a huge business needs accountants more and has more to gain and more to spend and, consequently, more to write off against the business. The smaller guy just struggles either way.

As with so much in life, it boils down to that old problem of critical mass.

Rob C

JaimeM

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« Reply #6 on: July 27, 2009, 07:12:03 am »

Quote from: Rob C
That's simple: your invoice from them is to collect from you without too much information of how they arrive at the educated guess of what they would like from you; their work for you, on the other hand, is to make a presentation, on your behalf, to a very fussy client (Mr Taxman ) who's more than a little interested in the small print within your return. Hell, the accountant, primarily, is hiring you his legitimacy, not his time; the time you buy from him saves you tax you´d otherwise not know you could save, even if being a small business the figures are small.

It´s another example of the qualities of scale: a huge business needs accountants more and has more to gain and more to spend and, consequently, more to write off against the business. The smaller guy just struggles either way.

As with so much in life, it boils down to that old problem of critical mass.

Rob C
Beautifully put Rob, I think I'll take it with me and quote it to the next accountant I hire.

Cheers

Jaime
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Justan

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« Reply #7 on: July 27, 2009, 11:15:47 am »

Quote from: JaimeM
I do use a program here called Myob (Mind your own business) for doing the books, but I agree the partnership isn't that complicated and the funny thing is I don't know about in the US but every accountant I've ever used always have the vaguest invoices of anyone, nothing itemized, considering how they get on your case to have everything documented.

I don’t know if MYOB does taxes but most definitely look into a program that does. If it takes you 10 hours to learn, (and it won’t) you’ll be thousands of $$ ahead of where you are now.  You can always use a previous year’s tax return to give you a good idea of about what the numbers should be.

If the CPA doesn't disclose their time they are demonstrating a complete lack of accountability and therefore probably, screwing you. When you shop for another, ask if they disclose their time in the invoice. I strongly suggest you ask your current or soon to be former accountant why he refuses to document his time. It will be good if only for the tap dance you’ll get
« Last Edit: July 27, 2009, 11:17:23 am by Justan »
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Justan

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« Reply #8 on: July 27, 2009, 11:26:31 am »

Quote
Hell, the accountant, primarily, is hiring you his legitimacy, not his time; the time you buy from him saves you tax you´d otherwise not know you could save, even if being a small business the figures are small.

I bet many buyers of CPA time believe that, and they have put themselves at a serious disadvantage by doing so. If the buyer doesn’t have a clue then they are setting themselves up to be taken.

I couldn’t imagine running a business and not having first hand knowledge of all relevant parts of taxation. Especially with the power of the internet, where you can pretty easily get an authoritative answer to most tax related questions for no more effort than a little time looking, not taking this effort is foolish and expensive. It is like taking an employee’s mentality and applying it to running a business. Not the way it’s done.

Rob C

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« Reply #9 on: July 27, 2009, 04:43:01 pm »

Quote from: Justan
I bet many buyers of CPA time believe that, and they have put themselves at a serious disadvantage by doing so. If the buyer doesn’t have a clue then they are setting themselves up to be taken.

I couldn’t imagine running a business and not having first hand knowledge of all relevant parts of taxation. Especially with the power of the internet, where you can pretty easily get an authoritative answer to most tax related questions for no more effort than a little time looking, not taking this effort is foolish and expensive. It is like taking an employee’s mentality and applying it to running a business. Not the way it’s done.



Justan

You are mising the point. The point is that, in the UK at least, an accountant-presented set of books makes use of the accountant´s professional standing in the eyes of the IRS. It is on the CA's reputation that your credibility partly rides; this has nothing at all to do with the obvious desirability of understanding tax law or otherwise and everything to do with avoiding personal hassle with the blessed IRS. The underlying idea is that no reputable CA is going to tarnish his reputation by playing silly buggers on your behalf; Mr IRS knows this, which results in your books being received without prejudice unless you already have a certain reputation connected with sailing very close to the wind.

It may be different in your country - I have no idea - there are exceptions (and exception taken) to almost everything.

Rob C

JaimeM

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« Reply #10 on: July 27, 2009, 08:10:20 pm »

Quote from: Rob C
Justan

You are mising the point. The point is that, in the UK at least, an accountant-presented set of books makes use of the accountant´s professional standing in the eyes of the IRS. It is on the CA's reputation that your credibility partly rides; this has nothing at all to do with the obvious desirability of understanding tax law or otherwise and everything to do with avoiding personal hassle with the blessed IRS. The underlying idea is that no reputable CA is going to tarnish his reputation by playing silly buggers on your behalf; Mr IRS knows this, which results in your books being received without prejudice unless you already have a certain reputation connected with sailing very close to the wind.

It may be different in your country - I have no idea - there are exceptions (and exception taken) to almost everything.

Rob C
I think your right, I'm a photographer not an accountant, I'm flat out trying to learn all the things involved to improve my skills as a photographer and deliver the goods to my clients, certainly I've go no problem with paying another professional to do something at which I have no real expertise and no desire to become good at, I think your also right when you say you are paying for their credibility in the eyes of the Taxation department which is all worth something, simply in my case I think it's too much over the fair and reasonable mark.
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Justan

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« Reply #11 on: July 28, 2009, 12:23:24 pm »

Rob,

Thank you for your explanation. I have no knowledge of taxation practices or perceptions in the UK, or anywhere but the US.

You are making the case that people are paying an accountant to gain a perception of credibility. This amounts to an urban legend.

> You are mising the point.

I may be, or your may be.

> The point is that, in the UK at least, an accountant-presented set of books makes use of the accountant´s professional standing in the eyes of the IRS.

According to who? I agree that a perception of greater credibility is one reason people go to accountants. But how do you know that using an accountant adds or creates credibility in the perception of the IRS? Some proof of your theory could be made if the IRS (yours or ours) scored returns differently in part if they were or were not prepared by the taxpayer.

> …and everything to do with avoiding personal hassle with the blessed IRS.

Fear is a strong driving force. Yet, do you have evidence that one’s likelihood of audit as a mom and pop business is measurably higher if they don’t use a CA?

> The underlying idea is that no reputable CA is going to tarnish his reputation by playing silly buggers on your behalf; Mr IRS knows this, which results in your books being received without prejudice

Oh those silly buggers. I understand the comment but the concept doesn’t stand up very well. First, with over 60 million people in the UK, unless using a CA is law, it’s not logical or even reasonable that the IRS could or would discriminate amongst those who don’t use an accountant. Wouldn’t you agree that there are too many people and too many tax forms involved to make any such convenient and arbitrary presumptions about credibility? I bet every CA the world over is delighted and well employed by people who share your perception!

With tens of millions of tax forms for the IRS to process (in the UK. In the US hundreds of millions is closer to the mark), the accountants names could have no real bearing on the presumption of the tax payer’s credibility. Unless you can demonstrate that more get audited who don’t use an accountant, your comment amounts to an urban legend.

But you could be stating the truth. I have no way of telling from here.

Here the tax code amounts to a professional works act. But using an accountant isn't a requirement. In the end, as long as the forms are filled out properly and competently, the tax payer has little to worry about, at least in the US.

David Sutton

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« Reply #12 on: July 29, 2009, 05:11:47 am »

Quote from: JaimeM
I think your right, I'm a photographer not an accountant, I'm flat out trying to learn all the things involved to improve my skills as a photographer and deliver the goods to my clients, certainly I've go no problem with paying another professional to do something at which I have no real expertise and no desire to become good at, I think your also right when you say you are paying for their credibility in the eyes of the Taxation department which is all worth something, simply in my case I think it's too much over the fair and reasonable mark.
There you have it. You are paying 4x more than I pay in NZ as a solo musician and teacher. I'd do a bit of shopping around. My accountant enables me to relax when I finish work and come home. I get an extra 8 months to file a return, and in November he yells at me long and loud enough so that he has the figures in enough time to do whatever it is he does. I sign the forms but I don't know what the words mean. I can enjoy my life and focus on what I do best. I'd pay twice what I do in order to have this luxury, but I'm not telling him that.
David


« Last Edit: July 29, 2009, 05:14:24 am by Taquin »
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Rob C

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« Reply #13 on: July 29, 2009, 05:19:59 am »

Justan

Without getting into a pointless yes/no argumnt, the fact that 60 million people live in the UK is irrelevant. The taxpayers who are under the eye of the Taxman do not account for 60m returns - never had any of our babies make returns - we are speaking of the self-employed here, who are forever on the edges of credibility and/or the happy gaze of our Mr T. The pay-as-you-earn have nothing to worry about either; it´s the shadowy world of the self-employed that governments dislike: the possibility of evasion is an ever-present risk in the mind of the collectors. Frankly, though they spout that we might be the engine of the future employment surge (ha, bloody ha) the reality is that the more of us that exist the wider the scope facing them (taxmen) for finding hidden wealth. However, as a group, we take up too much time for too little return and that´s partly why the logic of the argument would indicate that going through professional channels with one´s return has already acted as filter no.1, directing closer attention away to the non-represented.

The big companies are something else and are perfectly able to look after their own financial returns. Also, with so much money at stake within one source (the company), I think a lot of rules and regulations get slightly bent on both sides. I can see little other excuse for the financial meltdown that has hit the banks, from the top down.

Yes, I can give a little personal illustration of this question mark that hangs over the small business. In 1966, the time of my genesis in this swamp of the self-employed, the UK had something called Purchase Tax. In essence, as a pro, you could register for an exemption certificate that allowed you to purchase film and paper less this tax. Part of the deal was that you kept strict stock records of materials used. One day, I had a surprise visit from a Tax Inspector who turned up at the studio and asked to see both my material store and the records. This I allowed at once, with no question in my mind at all. You know what, it turned out that I was two 120 films short and which I simply couldn´t account for in any manner at all. That mother spent an entire afternoon of his time and mine looking through my studio and books in an effort to chase the tax on two rolls of film. Not the price of two rolls of film, the tax value included therein.

I rest my case on the mindset you have to deal with and why you need every single advantage you can find.

Rob C

Justan

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« Reply #14 on: July 29, 2009, 12:22:22 pm »

Rob,

> Without getting into a pointless yes/no argumnt, the fact that 60 million people live in the UK is irrelevant.

Not irrelevant or pointless since we are talking about the taxing entity. The population of taxpayers is the base model for the taxing entity. From that model we may get an idea of how many may work for the IRS and how the IRS pursues given groups.

Your original point is that the IRS closely watches small businesses in particular for their use of CAs. I'm saying that your point is statistically impossible. You appear to counter by stating that facts are irrelevant to your point. You appear to dismiss facts and instead evade.

> The taxpayers who are under the eye of the Taxman do not account for 60m returns - never had any of our babies make returns - we are speaking of the self-employed here, who are forever on the edges of credibility and/or the happy gaze of our Mr T.

I did not write that. Read my comment again.

> The pay-as-you-earn have nothing to worry about either; it´s the shadowy world of the self-employed that governments dislike: the possibility of evasion is an ever-present risk in the mind of the collectors.

Facts not in evidence. Again, the tax man has no incentive to give anyone a pass. It is clearly not in their interest to do so. And the courts and the gov would go after them as if they were silly buggers if they did. Here, instead of responding to that, you pretend to read the mind of the tax collectors.

> Frankly, though they spout that we might be the engine of the future employment surge (ha, bloody ha) the reality is that the more of us that exist the wider the scope facing them (taxmen) for finding hidden wealth.

Again, an opinion lacking facts. Lets talk about facts, shall we? According to a source, as of 2008 there are stated to be about 2.1 million business enterprises in the UK. The source goes on to state that the distribution is 25.4% sole proprietors, 14.1% partnerships, and 3.9% “government and non-profit” businesses. http://www.bytestart.co.uk/content/news/st...ises-2008.shtml The remainder are not considered small businesses. Those numbers translate to roughly 903,000 small businesses. By your logic, those 903,000 small businesses are under the close eye of the tax man, based on if they use an accountant and which one they use. That is silly. How many people would it take to do 2nd tier audits of 903,000 returns? And you suppose that they keep a list of CAs as part of their audit process? Maybe they do. I frankly doubt it, but I ask for proof.

> However, as a group, we take up too much time for too little return and that´s partly why the logic of the argument would indicate that going through professional channels with one´s return has already acted as filter no.1, directing closer attention away to the non-represented.

So first you say they keep a close eye, and now you say small businesses take up too much time? (rolling eyes). 903,000 business taxpayers, almost half of the businesses in the UK are well worth IRS time. Your comment employs specious logic.

> The big companies are something else and are perfectly able to look after their own financial returns. Also, with so much money at stake within one source (the company), I think a lot of rules and regulations get slightly bent on both sides. I can see little other excuse for the financial meltdown that has hit the banks, from the top down.

Drifting far from the topic at hand here…. But you do hint at the primary role of a CA, and also hint at why their credibility is little better than the average tax payer.

> Yes, I can give a little personal illustration of this question mark that hangs over the small business. In 1966, the time of my genesis in this swamp of the self-employed, the UK had something called Purchase Tax. In essence, as a pro, you could register for an exemption certificate that allowed you to purchase film and paper less this tax. Part of the deal was that you kept strict stock records of materials used. One day, I had a surprise visit from a Tax Inspector who turned up at the studio and asked to see both my material store and the records. This I allowed at once, with no question in my mind at all. You know what, it turned out that I was two 120 films short and which I simply couldn´t account for in any manner at all. That mother spent an entire afternoon of his time and mine looking through my studio and books in an effort to chase the tax on two rolls of film. Not the price of two rolls of film, the tax value included therein.

Thanks for the story! I was audited too. In my case i owed them a little for 1 year but they ended up owing me money (to my delight) for 2 years. But like you, I did spend many many hours in preparation and also many more hours dealing with the auditor.

The job of the IRS in the US to push people to follow the letter of the law and to collect what the laws state they are entitled to. An auditor told me “Everyone hates the IRS.” And that is why they are backed by law. In the US the IRS isn’t even obligated to follow due process. But they are *required* to present facts. Maybe in the UK they amount to a mafia who doesn’t depend on law or facts. I dunno. I kind of doubt it, given those 60 million people would not long tolerate it. You know, being a democratic government and all does come with it’s boundaries....

> I rest my case on the mindset you have to deal with and why you need every single advantage you can find.

Gosh, Rob, thanks so much for patronizing me. I feel so special!  Really, Rob, I'm making an attempt at an adult factual conversation. This is a site where we openly turn to each other to gain knowledge and share experiences. This conversation is no different in goal or intent. The means to achieve this goal is largely from the sharing of factual information.

You appear to live in the UK, I live in the US. The OP lives in Oz. It is a rich opportunity to learn something about each other’s culture and explore a topic that touches us all. You don’t wanna do that. You don’t even wanna have a factual discussion. That is okay with me, and I'm truly sorry if your temperament doesn’t permit that.

Unless you are willing, I’ll refrain from similar engagements in the future. Thanks very much for your time.



Justan

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« Reply #15 on: July 29, 2009, 12:25:45 pm »

Quote from: JaimeM
I think your right, I'm a photographer not an accountant, I'm flat out trying to learn all the things involved to improve my skills as a photographer and deliver the goods to my clients, certainly I've go no problem with paying another professional to do something at which I have no real expertise and no desire to become good at, I think your also right when you say you are paying for their credibility in the eyes of the Taxation department which is all worth something, simply in my case I think it's too much over the fair and reasonable mark.

Jamie,

Tax preparation is a service for fee. If you are uncomfortable with doing tax forms, heck, it only costs money to get someone to provide the service. My own values direct me to work for 8 hours or so (that’s about how long it takes me to do my federal returns) rather than to pay someone to do the same.

You can do a lot to minimize the time that a CA needs. I've worked with a lot of accounting programs (and a lot of accountants for that matter) over the years. Many accounting programs permit direct export into a number of tax preparation programs. This has become a standard feature in many programs for small businesses. This ability would get you from your bookkeeping software to the federal tax forms with little effort, beyond the original setup time. Were you in the US I could name specifics, but I don’t have direct knowledge of what programs are coded to work with Oz tax laws. I have a friend who lives there and will ask if you’d like.

FWIW, for some time spent learning, you could greatly and for-ever-after reduce your tax preparation bill to a couple of hundred dollars per year. Speaking only for myself, I’d rather spend the $2,300 you cited on things I enjoy rather than supporting a tax parasite.

Dittos

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« Reply #16 on: April 08, 2021, 08:35:58 am »



That's simple: your invoice from them is to collect from you without too much information of how they arrive at the educated guess of what they would like from you; their work for you, on the other hand, is to make a presentation, on your behalf, to a very fussy client (Mr Taxman ) who's more than a little interested in the small print within your return. Hell, the accountant, primarily, is hiring you his legitimacy, not his time; the time you buy from him saves you tax you´d otherwise not know you could save, even if being a small business the figures are small.   

It´s another example of the qualities of scale: a huge business needs accountants more and has more to gain and more to spend and, consequently, more to write off against the business. The smaller guy just struggles either way.

As with so much in life, it boils down to that old problem of critical mass.

Rob C



Yes, you're right
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petermfiore

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Re: personal tax advisor near me
« Reply #17 on: April 08, 2021, 04:30:01 pm »



Yes, you're right

Do you realize that you're answering a nearly 12-year-old thread...?

Peter
« Last Edit: April 09, 2021, 06:36:12 am by petermfiore »
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