Accountant for Lawyers

As a lawyer, the tax deductions that are available to you can include:

• The cost of reviewing your annual practicing certificate (but not the original cost you paid when obtaining it)
• Union & professional association fees
• Car expenses
• Legal journals, magazines, etc. related to your profession
• Supreme Court library fees (if they are paid annually)
• Work-related phone and internet expenses that are not covered by your employer
• Self-education and study expenses to maintain your professional development. This can include the cost to attend seminars and conferences.
• Certain home office expenses
• Professional indemnity insurance
• And more

For more information on what you can claim as a lawyer, have a look at this fact sheet from the ATO:

https://www.ato.gov.au/uploadedFiles/Content/IND/Downloads/lawyer.pdf

Yes, lawyers work with accountants!

Accountants and lawyers often work hand-in-hand on matters relating to tax, audits, property and business valuation.

The legal and accounting sectors also often cross paths when it comes to:

• Commercial law
• Estate planning
• Trust accounts
• Property law
• Investments
• Shares
• Superannuation
• Company structures

As a legal firm, it is important for you to work with an accountant and seek accounting advice from someone who understands the unique challenges of your industry and has an understanding of the legal sector.

At POP Business, we use a number of different accounting software to deliver our high quality services. The most common accounting software used by lawyers includes XERO, MYOB and Quickbooks. 

We also use MYOB or XERO accounting software to oversee your bills, arrange tax and expense claims and improve your connections with banks. This helps us to maintain consistent and frequent communication with you. 

While there are a range of different accounting software on the market that provide legal services, we combine the best elements of this software with processes administered by our accountants.

This gives you the advantages of our expert insight combined with the efficiencies built into software programs.

1.  Structuring – For example, you can use a trust structure or company structure to operate the business/firm which will employ your employees and operate the practice. You will then pay this entity for operating the practice. You will invoice the clients directly and “pay” this structure a management fee for managing your employees and operating the practice for you.
2. Use of your spouse as an employee and assisting your business in administrative and bookkeeping tasks. You can then pay your spouse a wage/salary and claim a deduction.
3. Maximise your claim for superannuation by making additional concessional superannuation contributions up to the threshold.
4. Purchase or motor vehicles in your business if you use it majority for business. You can then claim 100% of the GST and claim an upfront deduction for the total cost of the motor vehicle up to the car cost limit. This car cost limit is $60,733 (GST inclusive) in the 30 June 2022 year.

The structure you operate your legal practice will affect the amount of tax you pay, the deductions you can claim and the manner in which you are taxed.

There are three main structures for legal practices and taxation methods:

1. As a sole trader – taxed in your own personal name.
2. In a company – taxed at the company tax rate.
3. In a trust – income of the trust to be distributed to the beneficiaries.