Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.
Please note this sub-forum does not provide professional finance advice. You should seek advice from a licensed financial advisor. If investing please consider our affiliate links for new accounts: Sharesies or Hatch. To post in this sub-forum you must have made 100 posts or have Trust status or have completed our ID Verification



jonb

1675 posts

Uber Geek

Trusted

#211695 7-Apr-2017 10:27
Send private message

A family member who will need to do a tax return for the financial year just gone, with about $20000 income and obviously with expenses.   Clueless about this myself, being a full PAYE person.

 

Is it best muddling through yourself for that relatively small income, or getting an accountant to do it.   Any recommendations for North Shore?


View this topic in a long page with up to 500 replies per page Create new topic
 1 | 2 | 3 | 4
Coil
6614 posts

Uber Geek
Inactive user


  #1758014 7-Apr-2017 10:32
Send private message

Hey, When i was a sparkie i had a similar income for last financial year (Wasnt a contractor for the full year)
I got all my gas receipts and depreciated assets and go around $800 back by using an accountant. Cost me $300...
I couldnt do it myself so it was money i didnt have before. This year hes getting me to compile all my receipts and income into excel and he will just process it from there. Said to be cheaper..

 

 


Affiliate link
 
 
 

Affiliate link: Free kids accounts - trade shares and funds (NZ, US) with Sharesies.
itxtme
1905 posts

Uber Geek


  #1758015 7-Apr-2017 10:35
Send private message

Have they done any of the work in regards to book keeping already?  Its pretty straight forward if they have, just fill in the boxes.  The biggest benefit with going to an accountant is that they will also point out savings you can make with entitlements that may not have been considered, and this alone could offset the cost of using one.

 

Most accountants are moving to a monthly service fee model, but I am sure you will be able to get someone to go through the accounts.  Expect it to cost over 1k though if you need the books sorting out


solutionz
589 posts

Ultimate Geek
Inactive user




timmmay
18576 posts

Uber Geek

Trusted
Subscriber

  #1758026 7-Apr-2017 10:50
Send private message

I used to be completely self employed with multiple income streams, including some overseas income. I tried to do my tax myself to start with, but when it came to depreciation and such I gave up and got an accountant. I've had an accountant for 10 years or so. Before I used accounting software I don't remember what it cost, it was all done by coding bank statements. Accountants are useful when things are complex, when you want to do things like home office or vehicle deductions, or when you have overseas income or sales.

 

About 6-7 years ago I got Xero, which cost me $600 / year ($50/month). The accountant cost me $1000/year + GST to do tax returns and provide financial reports. The accountant cost cut down to $500/year plus GST when I said I just wanted tax returns, because all they did was print the returns in Xero and charge me $500 for them. That's still $1100 + GST per year total.

 

Xero is quite cool. It gets a feed from your bank account, you code it. It remembers codes and suggests codings. It sends invoices and you can enter expenses. At tax time it does all the return calculations for you. If you have anything that's not already in Xero you can journal it, which as I understand it means to basically tells the system to take it into account without it going through bank account or expense area.

 

I'm now employed full time and my income streams are much simpler, so I moved to the $30/month Xero plan. I still pay $500/year plus GST for my tax returns to be prepared. I just filled out their tax information sheet last night actually.

 

Given things are much simpler now, and technology is very helpful, I think I might stop using the accountant and just do everything myself using Xero. It means I'll have to do a little bit of learning around things like home office expenses, but that should be fairly straightforward, and it'll save me $500/year at the cost of a little time.

 

--

 

So, to answer the question, consider Xero if the business is simple but you don't want to do the returns manually. It's probably too late for this financial year, you'd have to do manual data entry. But if you start now and have an accountant the first year next year will be much easier.


MikeB4
17148 posts

Uber Geek

ID Verified
Trusted
Subscriber

  #1758039 7-Apr-2017 11:26
Send private message

A quick return to answer this.

 

I am assuming this person is self employed. What kills many start ups and self employed aspirations is the second year tax burden where you are dealing with potential terminal tax for the first year and provisional for the second year. It is important at this point to get good professional advice as this can stop considerable expense and  stress.


cadman
1014 posts

Uber Geek
Inactive user


  #1758042 7-Apr-2017 11:30
Send private message

It's really not that complex unless they choose to make it that way with tricky tax minimisation schemes. So it's best for them to learn to do it for themselves because they need to UNDERSTAND the implications of expenditure rather than just know the amounts - you'd be surprised the number of people out there that think just because something is 100% tax deductible it's somehow free.

 

They don't need to purchase a specific program like MYOB or XERO - once you know what you're doing you can just use Excel which is is more than sufficient with a fairly basic spreadsheet. That's what I've used for nearly 20 years.


MikeAqua
6893 posts

Uber Geek


  #1758062 7-Apr-2017 12:05
Send private message

MikeB4:

 

A quick return to answer this.

 

I am assuming this person is self employed. What kills many start ups and self employed aspirations is the second year tax burden where you are dealing with potential terminal tax for the first year and provisional for the second year. It is important at this point to get good professional advice as this can stop considerable expense and  stress.

 

 

^^^ This





Mike




sonyxperiageek
2855 posts

Uber Geek

Trusted

  #1758065 7-Apr-2017 12:10
Send private message

cadman:

 

It's really not that complex unless they choose to make it that way with tricky tax minimisation schemes. So it's best for them to learn to do it for themselves because they need to UNDERSTAND the implications of expenditure rather than just know the amounts - you'd be surprised the number of people out there that think just because something is 100% tax deductible it's somehow free.

 

They don't need to purchase a specific program like MYOB or XERO - once you know what you're doing you can just use Excel which is is more than sufficient with a fairly basic spreadsheet. That's what I've used for nearly 20 years.

 

 

So if something is 100% tax deductible, what does it potentially mean? (I want to try and understand this concept too) smile





Sony

 

--

 

NZ TechBlog Follow me on Twitter | My Geekzone blog | Sharesies Referral | Contact Energy Referral | UberEats Referral Code: eats-17atx


Geektastic
16800 posts

Uber Geek

Trusted
Lifetime subscriber

  #1758070 7-Apr-2017 12:15
Send private message

timmmay:

 

I used to be completely self employed with multiple income streams, including some overseas income. I tried to do my tax myself to start with, but when it came to depreciation and such I gave up and got an accountant. I've had an accountant for 10 years or so. Before I used accounting software I don't remember what it cost, it was all done by coding bank statements. Accountants are useful when things are complex, when you want to do things like home office or vehicle deductions, or when you have overseas income or sales.

 

About 6-7 years ago I got Xero, which cost me $600 / year ($50/month). The accountant cost me $1000/year + GST to do tax returns and provide financial reports. The accountant cost cut down to $500/year plus GST when I said I just wanted tax returns, because all they did was print the returns in Xero and charge me $500 for them. That's still $1100 + GST per year total.

 

Xero is quite cool. It gets a feed from your bank account, you code it. It remembers codes and suggests codings. It sends invoices and you can enter expenses. At tax time it does all the return calculations for you. If you have anything that's not already in Xero you can journal it, which as I understand it means to basically tells the system to take it into account without it going through bank account or expense area.

 

I'm now employed full time and my income streams are much simpler, so I moved to the $30/month Xero plan. I still pay $500/year plus GST for my tax returns to be prepared. I just filled out their tax information sheet last night actually.

 

Given things are much simpler now, and technology is very helpful, I think I might stop using the accountant and just do everything myself using Xero. It means I'll have to do a little bit of learning around things like home office expenses, but that should be fairly straightforward, and it'll save me $500/year at the cost of a little time.

 

--

 

So, to answer the question, consider Xero if the business is simple but you don't want to do the returns manually. It's probably too late for this financial year, you'd have to do manual data entry. But if you start now and have an accountant the first year next year will be much easier.

 

 

 

 

Accountants have access to a system called Bank Link which does that fetching transactions from your accounts and so on. Ours charges no extra for using it. They just query us if they have questions on what something was for.

 

 

 

Another benefit of accountants is the whole advice aspect and the assistance if the Revenue decide to come poking around.






Batman
Mad Scientist
28002 posts

Uber Geek

Trusted
Lifetime subscriber

  #1758073 7-Apr-2017 12:19
Send private message

It means you deduct that expense from your gross income, then apply tax on gross less said expenditures




Involuntary autocorrect in operation on mobile device. Apologies in advance.


Geektastic
16800 posts

Uber Geek

Trusted
Lifetime subscriber

  #1758076 7-Apr-2017 12:21
Send private message

MikeB4:

 

A quick return to answer this.

 

I am assuming this person is self employed. What kills many start ups and self employed aspirations is the second year tax burden where you are dealing with potential terminal tax for the first year and provisional for the second year. It is important at this point to get good professional advice as this can stop considerable expense and  stress.

 

 

 

 

Yes this is a really poor aspect of our "good to do business in" system. We struggled hard getting straight when that was where we were. It's a killer when you have Terminal Tax, Provisional Tax and GST to fund all at once...!

 

 

 

Also - related - ensure that the person mentioned by the OP is dealing properly with their ACC needs. My advice, FWIW and I make no claims as to it's usefulness, is to opt for Cover Plus Extra. That way, you tell the ACC what payment you want in the event that you cannot work and they tell you what it will cost. You pay, they pony up immediately in the event of an accident and none of that 85% of your income business applies. Given that self employed income fluctuates and mortgages and rents still have to be paid, suddenly getting 85% of a bad year's income might not be helpful...






darylblake
1103 posts

Uber Geek

Trusted

  #1758084 7-Apr-2017 12:27
Send private message

I got Craig at SBA in Browns Bay to my tax. He has done it for the last couple of years. Pretty nice guy. 

If your friend gathers ALL the information, receipts, and how much they invoiced/credited etc. He can do it reasonably quickly. 

 

They work on time based. So it depends how long it takes them to do it, determines how much you will get charged. I usually pay roughly just under $400. 

 

There are definitely pro's to using an accountant. The main con being that you obviously have that as another expense. However you also cover yourself a bit, because it doesn't look as dodgy to the IRD if you muck up and they come hassling you for money later on. Accountants also know if there are any other benefits/expenses etc you can claim for, and can sort your your personal tax as well as business.

 

 


sonyxperiageek
2855 posts

Uber Geek

Trusted

  #1758089 7-Apr-2017 12:33
Send private message

joker97: It means you deduct that expense from your gross income, then apply tax on gross less said expenditures

 

Wouldn't all business expenses be tax deductible anyway? Does this mean that if something is said to be tax deductible such as some donation fees, even if for personal donations, they can be tax deductible?





Sony

 

--

 

NZ TechBlog Follow me on Twitter | My Geekzone blog | Sharesies Referral | Contact Energy Referral | UberEats Referral Code: eats-17atx


Geektastic
16800 posts

Uber Geek

Trusted
Lifetime subscriber

  #1758095 7-Apr-2017 12:46
Send private message

sonyxperiageek:

 

joker97: It means you deduct that expense from your gross income, then apply tax on gross less said expenditures

 

Wouldn't all business expenses be tax deductible anyway? Does this mean that if something is said to be tax deductible such as some donation fees, even if for personal donations, they can be tax deductible?

 

 

 

 

In general, yes. There are some oddities around things like entertaining where the IRD get very het up about whether it is clients or staff and so on and allow less then 100% deductions. There may be other things.






Batman
Mad Scientist
28002 posts

Uber Geek

Trusted
Lifetime subscriber

  #1758104 7-Apr-2017 12:53
Send private message

sonyxperiageek:

 

joker97: It means you deduct that expense from your gross income, then apply tax on gross less said expenditures

 

Wouldn't all business expenses be tax deductible anyway? Does this mean that if something is said to be tax deductible such as some donation fees, even if for personal donations, they can be tax deductible?

 

 

Short answer: It's a question for your accountant. 

 

I don't have a long answer because I'm not an accountant. Grey things and complex things can be challenged by the IRD.





Involuntary autocorrect in operation on mobile device. Apologies in advance.


 1 | 2 | 3 | 4
View this topic in a long page with up to 500 replies per page Create new topic





News and reviews »

Google Bringing First Cloud Region to Aotearoa New Zealand
Posted 10-Aug-2022 08:51


ANZ To Move to FIS Modern Banking Platform
Posted 10-Aug-2022 08:28


GoPro Hero10 Black Review
Posted 8-Aug-2022 17:41


Amazon to Acquire iRobot
Posted 6-Aug-2022 11:41


Samsung x LIFE Picture Collection Brings Iconic Moments in History to The Frame
Posted 4-Aug-2022 17:04


Norton Consumer Cyber Safety Pulse Report: Phishing for New Bait on Social Media
Posted 4-Aug-2022 16:50


Microsoft Announces New Solutions for Threat Intelligence and Attack Surface Management
Posted 3-Aug-2022 21:54


Seagate Addresses Hyperscale Workloads with Enterprise-Class Nytro SSDs
Posted 3-Aug-2022 21:50


Visa Launching Eco-friendly Payment Solutions in New Zealand
Posted 3-Aug-2022 21:48


NCR Delivers Services to Run Bank of New Zealand ATM Network
Posted 30-Jul-2022 11:06


New HP Portfolio Supports New Era of Hybrid Work
Posted 28-Jul-2022 17:14


Harman Kardon Launches Citation MultiBeam 1100 Soundbar
Posted 28-Jul-2022 17:10


Nanogirl Labs Launches Creator Project
Posted 28-Jul-2022 17:05


Marvel Snap Launches as an Action Collectible Card Game
Posted 26-Jul-2022 17:46


Jabra Talk 65 Review
Posted 26-Jul-2022 17:31









Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.







Backblaze unlimited backup