How much does one earn before it is worthwhile to have a tax agent managing his

3IX37

Today a mate of mine asked me how much he should earn before it is worthwhile to have a tax agent managing his tax affairs.

(This is purely my opinion)

My answer to him is below:
> The average market price for a simple tax return is $ 100 each, because it takes less than one hour for a tax accountant.  
> How long do you think it would take you for get it done? Including researching, and put everything together for mainly salary and interests, dividends, investment funds distribution from fund manager, and work deductions. Let's estimate a full day work, 8 hours.
> Let's do the math. $ 100 / 8 hr * 24 hr * 365 days = $ 109,500

The estimate result is if you are earning less than $ 109,500, it is more economical to do it yourself.  

claire_syd

很多人去tax agent是为了能多听点意见和多退点税，因为他们经验多知道哪里能claim back. 还有就是省事

我的意见时如果你只赚工资，no kids，那就自己退，因为无非就是工资+银行利息

如果有投资，有家庭之后，找个tax agent省事，而且可能能退得比你自己操作的多

mercedes

It is easy and likely for an accountant to find and claim "extra" $200 as deductible, which you wouldn't normally know or understand to do so;
That "extra" deductible $200 + the travel cost to see your accountant would pretty much cover your total of cost of $100;
In my view, always go for an accountant, save time and money, and you would learn much more from a good accountant.  

3IX37

You are right. at the end of the day, it depends on each individual's preference, like the choice of  dine out or cook home.

If we have to quantify the measurement, i guess $ 109,500 is the estimate. But I guess most of us have a better way to spend our times. :)

jhua4597

you don't pay your tax accountant to enter some numbers in etax, their value is the advise they give you on your tax situation and how to maximise your tax return.

LENNY_DONG

100 AVERAGE?

I WILL LAUGH IF 100 PER RETURN

mercedes

jhua4597 发表于 2012-10-9 16:02
you don't pay your tax accountant to enter some numbers in etax, their value is the advise they give ...

Precisely!
I used to do tax return by myself, burning the midnight oil trying to understand the annual tax pack; until I realized the value of my own time and the value of the accountant, a good accountant’s advice is priceless and could benefit for lifetime.

JohnnySu

How about quality
Base on your logic anyone who earns less than a lawyer does should prepare all the paperwork himself when selling a property?

Besides why x 24hrs x365? No one works 24hrs a day 365 days a year!:o

3IX37

taxbreak 发表于 2012-10-9 15:15
How about quality
Base on your logic anyone who earns less than a lawyer does should prepare all the ...

:) lol
I knew it would cause some controversy, but it is so good to see many positive feedback.

x 24 x 365 is purely a method of opportunity cost. And simplified Cost vs benefit comparison.

:)

shadowintopiece

孩子们，打断一下。你交给会计师的钱不是转年都能退回来的吗？为什么要纠结呢？

shayy

shadowintopiece 发表于 2012-10-10 14:51
孩子们，打断一下。你交给会计师的钱不是转年都能退回来的吗？为什么要纠结呢？ ...

咨询一下，是可以全退回来么？我以为是可以抵税，最多近一半而已

JohnnySu

shayy 发表于 2012-10-10 14:06
咨询一下，是可以全退回来么？我以为是可以抵税，最多近一半而已

correct

3IX37

shayy 发表于 2012-10-10 14:06
咨询一下，是可以全退回来么？我以为是可以抵税，最多近一半而已

That is so great. As a tax professional myself, i am so thrilled to see so many positive responses regarding to this topic.

In relation to your query, the fees of tax affair management can only be a deduction to reduce your next year taxable income, in turn reducing your next year tax liability at your next marginal tax rate. It is neither a tax offset, nor a refund.

Actually, the reason for the origin post was to see how public would response towards the topic.

From the result of the above, only one is suggesting that simple wage people can do tax return themself. The rest of feedbacks are actullay supporting the idea of using tax professional for tax return.


Here is actually what i think the reality is,  and I hope i can, through this post, convince some people that NOT ONLY wealthy people should use tax professionals for their tax affairs, but also mums and dads, who earn normal wages.

The origin analysis actually failed to consider the overall benefits from using a qualified tax profession.  

Let's do another breakeven analysis.

> Just say normal mums & dads earn net taxable income $80k
> for 2013, marginal tax rate for $80k is 32.5%.
> the $ 100 tax management fees would result tax benefit next year $ 34 ($100 deduction will result 32.5 tax benefit + 1.5 medicare levy benefit)
> the breakeven point is (100-34=66), $66/34% = $194

So the reality is, if by going to a tax professional can help you to identify an additional and potential deduction of $194, it already breaks even. No mention, it saves you form a whole day stressful works, so you can spend it with your family. Plus, it also ensures your tax compliance.

Trust me, at the end of day, the additional deduction of $194 wouldn't be that important, the most important thing is to keep ATO from knocking your door.

So even you are not rich YET ;) and still earn a normal wage, you should still go to a tax professional for your tax affair. But make sure, he or she is a registered and qualified tax agent. :)

LENNY_DONG

作为同行，我很佩服你可以打那么多英文，看起来很累

3IX37

STS-TAX 发表于 2012-10-10 20:42
作为同行，我很佩服你可以打那么多英文，看起来很累

I guess that explains all those grey hair i have. I am a bit too-old-school I presume. :)