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can you claim on bookkeeping?

Discussion in 'Accounting & Tax' started by Elives, 22nd Mar, 2016.

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  1. Elives

    Elives Well-Known Member

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    I was just wondering if you could claim on bookkeeping with your property management? paying bills etc. preparing tax returns..

    Cheers, Elives
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    If you pay a book keeper possibly. They would need to be licenced.
     
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    The ATO typically would consider that the cost would be limited to preparation of financial records etc. However the "cost" of such services would be very minimal as the effort is quite minimal. And paying a spouse is generally not accepted where non arms length pricing is involved and / or a tax benefit obtained from the arrangement. While bookkeepers have no licensing requirement the ATO might expect a commercial provider of such services and not a friend / relative.

    A bookkeeper cannot prepare and lodge tax returns.
     
  4. datto

    datto Well-Known Member

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    Can a bookkeeper prepare financial records and tax retturns but have the taxpayer just sign the forms?
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    not without a tax agent licence.
     
  6. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    The bookkeeper can prepare financial reports and accounting records etc and some who are registered with ATO as BAS agents can prepare and lodge a BAS (for a business). Otherwise, only a registered tax agent can prepare and lodge a tax form and ascertain a tax liability.

    To further complicate it a tax agent (financial adviser) cannot prepare or lodge any forms but may estimate tax liabilities in conjunction with financial advice.

    And a lawyer may give advice on any law including tax law, common law and ascertain a tax liability in conjunction with such legal practice but cannot prepare and lodge a tax form unless also registered with the Tax Practitioners Board. A solicitor not in practice cannot give any such advice as the Law Society may not permit them to practice uninsured.

    There is also the question of what is general v's advice for a fee.

    Full information at www.tpb.gov.au

    A BAS agent was recently fined some $82,000 for preparing income tax returns.
     
    Last edited: 24th Mar, 2016
    sanj likes this.
  7. Elives

    Elives Well-Known Member

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    i thought if you prepared them yourself . etc 1-2 hours per property say you have 10 properties thats 10-20 hours. seems unfair that you can't claim your own labour within a reasonable time.

    (in this scenario you self manage)

    Cheers, Elives
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    If you want to claim your own labour you would have to pay yourself - but then you would have to declare the income so the deduction would be cancelled out by the income.
     
  9. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    What would you be claiming? You pay yourself and then declare that payment as income?
     
  10. Elives

    Elives Well-Known Member

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    good point, yes i guess? etc if your a carpenter and have to fix things on the investment property you can claim materials but you can't claim labour? i thought it would be fair paying yourself the average carpenter wage and then claiming it. obviously it doesn't work that way.
     
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  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You cannot contract with yourself. But you can contract with spouses and companies which you may be the sole director and shareholder of.

    This is a way to shift income from a higher tax payer to a lower tax payer and reduce tax for the group. But it has to be done carefuly and commercially.
     
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  12. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    This would exclude sole traders?
     
  13. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes. Sole trading is not an entity. A sole trader is the individual and that individual still cannot contract with themselves.
     
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  14. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent

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  15. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    Would that apply for a spouse as well? I.e. I am the sole trader and use Chrissy as a book keeper.

    Or I own the property and Chrissy keeps track of rent payments, sends out receipts etc. in a book keeping capacity (I assume this arrangement wouldn't meet the 'arms length' requirements?)
     
  16. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    One spouse can contract with the other spouse.