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Tax - Do we have to use accountant

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  • Tax - Do we have to use accountant

    Hi there -

    My IPs is under an LAQC company.
    Its nearly end of tax year.

    My questions: do we HAVE TO use an accountant and auditor because my IP is under a company? I have read through some guides from IRD and it seems its very stright forward + I took 2 Accounting subjects at uni many years ago

    Accounting fees are claimable. But.. we only can get 39% MAX (the higest tax rate) out of that fees back. So its not really free service, isnt it?
    Last edited by duwi; 25-02-2006, 04:56 PM.

  • #2
    Hello duwi,

    As a general comment, I have lost money – and in some cases quite a lot of money – by doing things myself, including on occasions my own accounting.

    Sometimes the loss is hidden at the time and disguised as “I saved money by doing it myself and not paying a professional’, and only appears at a future date. By then of course, it is too late.

    So my advice is use an accountant.

    xris

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    • #3
      Xris's advise is good, but to answer your question, no you don't HAVE to use an accountant.

      Without up to date knowledge of IRD practice (e.g. interpretation of depreciation rules, changes in obligations under the consumer credit act, latest rules on claimable expenses), you may miss a deduction to which you are entitled.

      Worse, you may claim something to which you are no longer entitled and ignorance is no excuse.

      Having said that, is there a rule in Accountancy 101 that says "Accountants Fee" = "Tax Rebate"?

      cube
      DFTBA

      Comment


      • #4
        It depends on your level of Knowledge in my opinion and how much you value your time.

        I have suggested to another person on this forum (fudosan I think) who wast getting any value add out of his accountant to do it himself and then take to accountant for review only (not preparation) and a strategic meeting.

        The advantages of this are:
        - still get professional input
        - save on preparation costs
        - your input gives you a better understading of how it works.

        I guess this give you a third option to what you have previously suggested. Do a search (not sure what on) but I think there is quite a long thread with with more comments by me and others on this topic.

        Comment


        • #5
          I would also suggest using an accountant. Particularly in the first year. They might be able to give you some good advice on what you can claim that you had not thought of. They also might stop you from doing something you thought was legal but wasn't. Also advice of structuring things. It is money well spent.

          I also suggets shopping around for accountants. Their fees vary quite wildly. From a few hundred to a few thousand.

          Comment


          • #6
            Hi duwi

            That was my attitude at the start too, but I went to an accountant - they know many tricks of the trade that are not taught at uni or are not mentioned in ird info.
            Chemill

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            • #7
              Fiscal Joint Venture

              At the risk of stating the very obvious, look for an accountant
              who is a Property Investor.

              My experience is that the majority of accountants are very
              conservative. I have pressed points of view on the basis of my
              own sketchy understanding and there has been a financial
              benefit to me. That's a form of what's been said before and one
              I endorse. Don't just leave it to the Accontant. Get clued-
              up a bit, yourself, so that you're 'partnering' with the Accountant.
              Not abandoning it to the Accountant.

              One other oft-overlooked advantage is that the final date
              for the lodgement of tax returns moves from July to March
              under a special arrangement between the IRD and Accountants.
              This can be useful if you're busy and have trouble getting
              all the paperwork together on time.

              Another aspect is that the accountancy costs for sole traders
              is very small compared to other entities like Trusts or companies.
              Something to do with the requirements of the Financial Reporting
              Act, rather than complexity.
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              Comment

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