Share Trader accounting

I'm trading shares fulltime from home, several hundred trades a year, and my accountant is requesting details of every trade - is this normal please? I'm concerned he's just trying to create extra work to justify higher fees. I thought all the ATO needs to know is the total profit/loss made. I don't get many dividends either as I usually only hold shares for a few days. Any thoughts please?

 

sounds to me like the poor bloke is only trying to do his job.

Yes the ATO doesn't need to know the details of each individual trade but how else is your accountant going to calculate your profit/loss if he doesn't know the details of all your trades.

if you've done that already for him, then the question I'd ask is why don't you just do your own tax return? It's not hard.

 

I gave him the total figure. Then he emailed me telling me
he needed the details of all the trades. Now he's telling me
it may cost up to $11000 to get the details into various
forms etc required by the ATO (for next year's return.)

I need an accountant as I need to set up an SMSF and
some form of company/trust structure to minimize tax, but
giving him details of all trades seems totally unnecessary.

 

Hi ShareJunky,

Do you have your trades in an Excel spreadsheet?
I agree with YoungGun, have a crack at doing your own tax return. Don't forget those deductions!

Cheers,

Dan

 

Not so easy - I also have $450k in five different share funds.

 

then maybe you can shop around for a cheaper accountant but cheap is not always better.

Without knowing the details I can't tell if such an amount is justified but he does seem expensive....

 

asxBroker has a very good point,

I also trade from home and have the same dilemma as yourself,
You should be able to get your yearly statement from your trading web site in excel format and this should reduce your accountants bill substantially.

I have not yet done this myself so I cannot give you any specifics

I am interested to see how things work out for you.

regards
John

 

Thanks guys, but as I said before, I gave him the total figure (I keep all details in Excel myself) but he still insisted on getting details of all trades. My question is WHY does he need all the details?

 

Why don't you give a printout or a copy of your spreadsheet?
Perhaps he wants to confirm that your numbers are correct.
Double checking the figures is actually a good thing.
The buy and sell dates and price are also important.
But start by asking him what details he needs.

 

. .

 

then perhaps it's time to look for another accountant

 

I reckon the accountant is working under the assumption that even though you consider yourself a 'trader' that he is treating the trades as being on capital account i.e. he is treating each trade as a separate capital gains tax transaction.

If all your trades are with shares you have held for less than 12 months then this is totally irrelevant.

Based on what you are saying you would be a trader so you are correct - he simply needs the summary of the total income from the trades.

As others have commented, your should be able to download the appropriate reports from your brokerage account which will significantly reduce his work load. Go back to him / her and say $11k is ******** and what can you do to make it easier on him / her to do their job.

I have no idea on the complexity of your affairs - so I am not going to comment on the appropriateness of the quoted fee.

If you also need some structuring advice regarding using a trust and / or an SMSF then ensure your accountant hold some appropriate qualifications in this area. There are some good people on the Gold Coast - if you require a referral please send me a private message.

All the best!

 

Yes he's got no reason I can see to treat them as capital gains; I made it quite clear I only hold shares from a few days to a few weeks. I spoke to another trader today and he says he just gives his accountant his final profit figure, which should be all he needs. Maybe I should shop around for a good A.I. accounting program and avoid the bean counters entirely?

 

Hi Sharejunky,
I only started full time trading in December and my accountant only wants the final totals, and for me to keep all the buy/sell sheets on a cd somewhere safe in case of audit down the track. I can't see why yours is after all this stuff.

good luck with it..

 

sharejunky - I am offended!

But seriously, if your 'accountant' is simply a bean counter who simply acts as a tax collector on behalf of the ATO and doesn't give you adequate advice to save you tax and make your life easier, then by all means shop around!

Good luck