Tax time

smilearchitect on 09/05/2015 - 22:29

Hi

I have a peculiar scenario …
For arguments sake of I earn 100k$ and the tax rate is 50k$
My accountant says I have to cough up the 50k$ to tax man …which I feel is unfair .
According to him I have to concentrate more on increasing that 100k $ income …. But my point is if income increases their is a proportional increase in tax !!! Say if I work hard and make 200k$… The tax may proportionally increase to 100k$ (hypothetical assumption, am not quoting the actual rates by ato…)
I have asked him some tax minimisation strategies and only thing he said was put more money in super combine super with partner and or buy a negative geared property , having a family trust … And he says that's the only option available ….!
I am but concerned with that advise … What do you guys reckon ?????

Financial

Related Stores

Australian Taxation Office
Australian Taxation Office

Comments

  • jaybmate on 09/05/2015 - 23:08

    Are you getting paid PAYG?

    • smilearchitect on 09/05/2015 - 23:12

      No work on abn mate

      • nikey2k27 on 11/05/2015 - 09:10

        Do you have wife and few kids?

        nikey2k27 on 11/05/2015 - 09:10 (Collapsed - Offtopic. Show)
        • onlyletters on 11/05/2015 - 15:43
          +25

          Is she hot?

        • Aydin on 11/05/2015 - 17:14

          @eXtremist: lol, that escalated quickly

        • onlyletters on 11/05/2015 - 21:59

          @Aydin: just some fun :P

        • nikey2k27 on 12/05/2015 - 00:36
          -1

          Why i ask this what people who have kids and wife get all TAX back. Centrelink payments Childcare payment. No kids people like my self that pay all the TAX get none of it back.

        • onlyletters on 12/05/2015 - 03:52
          +1

          @nikey2k27: no they don't lol ur dreaming again

        • nikey2k27 on 12/05/2015 - 08:02
          -2

          @eXtremist: There was report done last year.

        • onlyletters on 12/05/2015 - 08:36
          +1

          @nikey2k27: Where is the report? You said if I have a wife and kids I pay no tax.. thats bs because I still pay heaps of tax..

      • sickllama on 12/05/2015 - 20:56

        Take your tax bill from last year, divide by 26 and set up direct debit each fortnight. This is your fair share of contribution to the country. By doing this you'll have the money at the end of the year to give over to the ATO.

  • Rashed on 09/05/2015 - 23:09
    +12

    Get a different tax accountant, CPA/CA qualified.

      • jaybmate on 09/05/2015 - 23:19
        +17

        Loyal, as in he's always willing to take your money?

        If you're on PAYG there isn't a huge amount of things you can do, but if you have your own ABN thats a different story. I'd get a new accountant, or at least research up on possible deductions for your industry that other people have done. What is your job?

        • smilearchitect on 09/05/2015 - 23:25

          Thank you .. What would you do ?

        • expertreader on 11/05/2015 - 15:49
          +6

          I have got a feeling/sixth sense telling me that he is an architect😄😄😄

        • etherealfal on 11/05/2015 - 19:19
          +10

          @expertreader: smile architect - dentist.

        • Charity on 12/05/2015 - 03:00

          @etherealfal:
          smile architect = comedian or fun person

          actually, thinking about it… a smile engineer would be the fun person; fixing up the smile architect's bad jokes.

          sigh… thinking about it too much. :(

        • Chrotzo on 12/05/2015 - 18:27
          +2

          A bigger tax refund does not equal to a better accountant, there are a lot of variables to the tax refund. A good accountant would tell you how to minimize your tax legally and not simply claiming what you want to claim. Everybody can get claim more expenses and get a bigger refund than an accountant… until they get audited by the ATO.

      • Rashed on 09/05/2015 - 23:21

        I do understand what you mean, but you are after a CPA/CA qualified tax accountant who's job will be to minimise your tax, and maximise your asset.

      • ozhunter on 09/05/2015 - 23:48

        What do you mean by loyal?

      • nikey2k27 on 12/05/2015 - 00:34

        loyal guy dose not help pay less TAX my dad found this one out hard way after 50 years.

    • Orgazmo on 10/05/2015 - 18:27
      +3

      What's the advantage of CPA qualified Accountant? My experience is the CPA will be usually be the firms Director and they will get a Jr accountant to actually process/file it. They usually don't give a rats about you unless you are a biggish pty ltd and will charge you ~$300 for a personal return.

      I'm now with someone who actually seems to care and charges a 1/3 of the price.

      • This Guy on 11/05/2015 - 01:29
        -2

        The $300 is a tax deduction. The Jr accountant will likely deduct it, making it a $150 fee after tax.

        The loyal account sounds like he won’t.

        A $50 gamble for potentially a few thousands off the dentist's tax bill sounds extremely reasonable.

      • scotty on 11/05/2015 - 08:13
        +3

        A CPA just means he/she has done the course and pass the exam, which can be achieved in 2 years. I thought CA or CPA are pretty much the standard basic qualification for accountants.

        Partners in an accounting firm however is a different story

        • CleverCounter on 11/05/2015 - 18:20
          +2

          Almost Scotty, there is a 3 year mentoring program which you have to work in an accounting firm as well… The subjects could be done in 2 years if they are crammed back to back, but most people spread it over the mentoring period. Plus to start CPA / CA programs you need to complete a university degree (usually business, commerce or accounting) that's 3 years… So all up, about 6 years to get the CPA / CA credentials. There are ongoing professional development requirements to maintain professional memberships as well.

        • scotty on 11/05/2015 - 19:01
          +6

          @CleverCounter: yeah forgot about the 3 year mentoring program but you get that while being storm troopers in those big accounting firms. 3 years of Commerce degree with 14-15 hours/week workload isn't that hard (comparing to 30 hours/week engineering degrees).

          I know that because my wife was a CPA. Got the certificate 3 years after graduating from uni (exam + working in a big4). However she never really got into accounting jobs — she did mostly tech audit and business analyse. I even have to do tax return for her. As she is no longer interested in getting back to accounting so a few years ago she just stopped paying the fee and let membership lapse. Yup, she was a qualified CPA for 10 years but never really did any accounting.

          I guess her situation wasn't a norm. However I was just trying to state that simply having a professional certificate doesn't mean he/she will be good at the job.

        • tohara on 12/05/2015 - 09:30
          -3

          @scotty:

          comparing a commerce degree to an engineering degree? Smart move scotty. Have you done both a commerce degree and an engineering degree? I'm assuming no, so why speculate that one is easier than the other?

          The number of hours you spend each week on a degree has absolutely nothing to do with how easy/hard it is. A smart person might devote half the required time, while a less smart person might take twice as long

        • scotty on 12/05/2015 - 09:39
          +6

          @tohara: My sample size —

          Me: Did a 4 year engineering degree with a few commerce subjects
          My wife: Did a 3 year commerce degree

          I knew her all the way back at uni :) Over the last 20 years I have also worked with hundreds of overseas students on UNSW campus doing everything from foundation studies to PhD, with degrees in engineering, social work, commerce, medicine, arts etc. Their stress level can be easily measured and compared.

        • tomclancy on 12/05/2015 - 13:04
          -2

          @tohara:

          comparing a commerce degree to an engineering degree? Smart move scotty.

          Taking on the owner of the very site you are posting on. Smart move tohara.

        • rushil01 on 12/05/2015 - 13:31
          +1

          @scotty:

          Just thought I'd chime in here. I have graduated from both Engineering and Commerce and although Engineering was more difficult overall, the Commerce degree still wasn't easy (especially when you consider some of the senior subjects) and definitely was more than 14/15 hours per week. If you wanted to compare the hardest commerce subject to the hardest engineering subject, they would easily be comparable.

        • tohara on 12/05/2015 - 15:21

          @PBG:

          Are you new to the whole forum thing? Its where people discuss things, if scotty didn't want to engage in conversation he wouldn't have replied. I knew he ran the site when i posted my comment but nothing i said was unreasonably, rude or personal in any way.

          We are both mature, educated men simply having a discussion on a forum

          If you think that someone should be punished in some way as a form of pay back for a comment then i suggest you don't ever run a business, specifically a website.

        • ajdlinux on 12/05/2015 - 15:57

          @rushil01: Double degree in Computer Science and Politics/International Relations here. STEM courses require more intense contact hours, and are probably on the whole slightly more difficult, but that's not to say other courses are trivial. For example, I'd say it's reasonably easy to pass an Arts degree - easier than passing CS - but getting a High Distinction in an Arts course isn't easy, particularly when you reach upper level courses. I'd suggest the same applies to a Commerce program.

        • tomclancy on 12/05/2015 - 16:17

          @tohara: Sheesh, it was a joke tohara. Lighten up, no need to take things so personally.

        • tohara on 12/05/2015 - 16:51

          @PBG:

          i didn't take it personally mate don't flatter yourself. Its a little hard to interpret a joke from a dig when i can't determine the tone of what you're writing

        • [Deactivated] on 12/05/2015 - 18:09

          @tohara: I did a double degree IT/ business . I can barely remember attending any of business classes and yet I passed all them with D or HD. The reason I couldn't attend my business lectures was because I was spending all my time in the computer science labs, slaving away till 1-2 in the morning.

          No comparison at all.

          Edit: Haven't used either of those degrees. Work for 8-9 months in Sales then straight back to uni for a psy/social work degree.

      • horsome on 11/05/2015 - 20:16

        Ever thought of doing yourself for free? Mygov so useful for lodging returns these days, equipped with ATO website, the $100-$500 return is becoming obsolete.

        • Chrotzo on 12/05/2015 - 18:21

          Mygov is only for a very simple tax return. a $500 tax return would be for a much more complicated tax return

  • tomclancy on 09/05/2015 - 23:20
    +63

    I have to cough up the 50k$ to tax man …which I feel is unfair

    Then move to another country. Tax rates have been (roughly) the same for decades. Its not like the ATO 'sprung' this tax rate on you by surprise.

    But my point is if income increases their is a proportional increase in tax !!!

    Yep. A pretty simple concept actually. I'm glad you can comprehend it. Same as in all tax paying countries. If income tax in Australia was a flat $50k for all taxpayers that hardly seems fair for people earning less than $50k.

    And he says that's the only option available ….!

    Your accountant has given you very good advice, actually. If you are looking for some magic deduction for $100k so you don't have to pay your fair share of tax to live in Australia and contribute to our society then adios muchachos.

    • plague69 on 14/05/2015 - 13:15

      Oh please… Fair share… How much does Apple pay? How much do doctors with five houses pay?

      OP, just buy property before they change the tax code. Interest on the mortgage is a "cost". Just make sure when you buy, ask a good accountant how to legally pay less on the capital gains if you wish to sell down the line. Preparation is key!

    • [Deactivated] on 10/05/2015 - 19:47
      +12

      Other people pay tax.

    • Logical on 10/05/2015 - 20:19
      +10

      don't worry S/architect…. just like in the real world, you will encounter bullying on OzB as well.

  • mskeggs on 09/05/2015 - 23:30
    +17

    Tax is progressive. Nobody is paying $50k tax on $100k income.
    The advice you got is adequate for investing tax effectively for a PAYG employee.
    Since you are contracting you have avenues to structure some expenses in the business, for example a vehicle. Depending on thresholds, it might make sense to put other expenses via the business and pay FBT if it allows your family to qualify for things like Family Tax Benefit.
    Not really able to offer any concrete advice based on "hypothetical" figures, as it varies a lot.

  • ozhunter on 09/05/2015 - 23:40
    +10

    What do you guys reckon ?????

    I reckon you could have googled "tax rates" instead of using hypotheticals. Why didn't you say 5k, instead of 50k?

    Here's a simple calculator to give you a good estimate of what you are required to pay https://www.moneysmart.gov.au/tools-and-resources/calculator…

    These are the tax rates http://www.taxcalc.com.au/

  • Mad Max on 09/05/2015 - 23:41
    +4

    The more you earn the more tax you pay , most people at least ;-).
    You have to take the good with the bad. So in a way it is good to pay a lot of tax. It means you are making a lot of money.

  • bluebat on 09/05/2015 - 23:47
    +11

    donate the extra money to a legitimate charity. so no tax, will that solve your concern?

    • This Guy on 11/05/2015 - 01:42
      +8

      Or start a religion and donate to it.

      The Architects of Smile

      Religious beliefs:
      Not paying tax
      Asking for tax advice on the internet

      Followers:
      1 alive
      1 billion spirts

      Established:
      70 million years ago by dinosaurs

      You get the idea. Once you have your beliefs worked out base your church out of your home and get your religion to pay for everything.

      IANAL/A. This is not advice.

      • BenK-Oz on 12/05/2015 - 18:43
        +4

        Giving to Religious organisations is not tax deductible in Australia

        • syousef on 13/05/2015 - 00:16
          +2

          Donating to a charity is. So he has to start The Lost Spirits of the Architects of Smile charity fund run by the church and giving to orphan spirits in NoneOfYaBusinessATOiStan ;-)

        • This Guy on 16/05/2015 - 00:29

          Thanks mate. Didn't know that.

      • syousef on 13/05/2015 - 00:14
        +1

        Currently operating from: Parklea Prison (tax evasion).

  • tio on 10/05/2015 - 03:41
    +6

    Actually, tax "minimisation/optimisation" isn't something new. Big companies have been doing since forever, coughBHPRiocough*. As long as it's not tax evasion, then you'll be fine.

    From what you're saying, I would imagine you're doing it the "sole trader" way, where your business income is your personal income at tax time. Otherwise, business/corporate tax rate is a flat 30% approx I believe, doesn't matter how much the business profit is.

    In sole trader case, family trust is quite popular actually. I think that's because trust's income (business income) can be distribute among family members, then trust members may be subjected to a lower tax bracket, resulting in lower over all payable tax amount.

    And super, though long waiting time it may be, it's actually not a bad idea. Popular super funds have been steadily earning approx 10% pa return, which is quite envious in current economy climate.

    And please, using a fictitious 50% tax rate as an example doesn't really help. For personal income tax, the average tax rates is around 30-40% level. At the 1percent side of the fence, it can approach 47%. Here's a nice brief chart showing the effective tax rate for different level of incomes

    http://catallaxyfiles.com/2011/10/13/average-income-tax-rate…

    IMO, unless you're making well more than the maximum tax threshold - $180,000 - don't bother trying to be creative with your tax affair, it's more hassle than it's worth.

    • FiDad on 10/05/2015 - 12:34
      +2

      If the Income is PSI in nature I dont think distributing it amount family memeber using family trust is allowed anymore. Agree with everything else you said

    • This Guy on 11/05/2015 - 02:15
      +2

      Gillards increase of the Tax Free Threshold from $6k to $18.6k moves thoses rates down a fair bit. For example

      Top 50%
      Earnt $44,547 in 2011
      Taxed at 16% today
      or ~$6916

      Top 10%
      Earnt $94,160 in 2011
      Taxed at 26% today
      or ~$24,700

      Top 1%
      Earnt $248,192 in 2011
      Taxed at 37% today
      or ~$91,624

      An excel file is below if you want to recalculate the percentiles:
      https://data.gov.au/dataset/taxation-statistics-2012-13/reso…

      Out of laziness I used the ATO calculator with no deductions:
      https://www.ato.gov.au/Calculators-and-tools/Tax-withheld-ca…

      • blint000 on 12/05/2015 - 12:36
        +3

        The tax free threshold is actually $18,200 not $18,600. This assumes full year tax resident.

        Whilst this was brought in during the ALP's government, It must be understood this was brought in at the same time that they wound back the Low Income Earner Tax Offset from $1,500 to $445 per annum, meaning effectively no (or very minor) net change for the vast majority of taxpayers. The $1,500 Low Income Earner Tax Offset was brought in by the previous Liberal government.

        • This Guy on 16/05/2015 - 00:30

          Thanks for the extra info and corrections mate :)

  • martinj on 10/05/2015 - 07:44
    +4

    Your accountant has already told you the only strategies available:

    Contribute to superannuation
    Negatively gear an investment
    Start a family trust

    There aren't really any other ways. If someone tells you they've got another strategy, be very carefully as there are heaps of scams offering to help you lower your tax, which just end up stealing your money.

  • Chik5555 on 10/05/2015 - 08:00
    +1

    Remember you don't get taxed the high tax rate for all your pay, just the part over that threshold. You get the lower tax rates for the first $x.

    Obviously keep receipts for any genuine deductions.

    Negative gearing will be costly and a big undertaking if it's just to save on tax

    I would look for income on the side, sell things on eBay, mow lawns etc for a bit of extra cash if needed.

    I don't think it applies to you because you aren't payg but I salary sacrifice for anything I can

  • StuffnStuff on 10/05/2015 - 11:17
    +4

    hypothetically if you found yourself a good dodgy accountant you could end up paying no tax at all.

    Personally I'd be happy to be paying $50k per year in tax as it would mean I'd have an income of around $160K and probably wouldn't need to use OZbargain :-)

    • OneJay on 10/05/2015 - 23:32
      +7

      I'm picturing the Saul Goodman of Tax Accountants.

      • frinik on 11/05/2015 - 12:54

        sounds like a good pilot for a new tv series :P

      • Charity on 12/05/2015 - 03:40
        -1

        Saul already does help with tax affairs… but Saul is so good, he gets you to pay tax ! lol so you don't come up on the radar! lol

        Remember when he was mad at Jesse… not for dealing, but because he was an idiot for not paying tax - a crime far more serious! lol

        Also, took care of Skylar's boss's tax affairs. (he just could never walk again) lol

    • tohara on 12/05/2015 - 09:38
      +6

      im sure there are plenty of people earning well over $160k that use ozbargain. I've never understood the mentality of people who assume that wealthy people don't need/want to save money. People stay wealthy by being savvy shoppers. If you get a significant pay increase in the future i'm almost certain you'll still use this website. Once an ozbargainer, always an ozbargainer

  • dp1 on 10/05/2015 - 12:26
    +2

    OP, don't you think the reason you earn what you do is because society is structured the way it is? If everyone tried to get out of paying tax (Greece etc) how long do you think you could maintain your income at that level?

  • [Deactivated] on 10/05/2015 - 15:40
    +15

    I have really good news for you. There is a way you can get out of paying $50K tax on $100K of income..

    It is really simple, only pay $25K tax. Because thats all that you're required to. Your hypothetical is double reality.

  • BartholemewH on 10/05/2015 - 20:05

    Surely there are tools of trade such as laptop, laser printer, vehicle, etc the help you derive your income? You should be claiming / depreciating these items through your tax return.

  • andyken on 10/05/2015 - 20:28
    +23

    im jealous man, how come you CAN earn $100k and not even know the tax rates.

  • speedyjonzalas on 10/05/2015 - 21:29
    +9

    Accountant here.

    Why not get rid of your accountant and lodge your own tax returns. You could put down less sales which will mean less tax….

    Or you could just live in the real world.

    Your accountant gave you reasonable advice, and I'm going to guess here that he isn't willing to give you any more because you complain about every dollar you pay for your accounting work to be prepared.

    I see this all the time - most people complaining about tax are nearly always the people who complain about our fees and want advice for free.

    They gave you options. If you dont like them leave them.

    • Charity on 12/05/2015 - 03:44
      -5

      .. the real world has good accountants ?

  • microsnot on 10/05/2015 - 23:00
    +41

    Honestly, I reckon you should stop wasting everyone's time. I have a feeling that you're actually a bot conducting a Turing test. All your posts are I have NFI about finance and I couldn't be arsed understanding so tell me what to do but I won't provide any details.

    I have noticed westpac , nab,hsbc put up ads saying free brokerage up to 600$ or on those terms .
    What does that mean ?
    Is it short for share trading?
    How does it work ?
    Any pitfalls if any , has anyone used it before ?

    I am bit confused . Is it cost effective to pay for trauma tpd and income protection through super or outside of super.
    I have been to zillion advisors and everybody is telling the truth only from their perspective … And am so confused… Tips appreciated

    What are the pitfalls of novated lease

    Folks and mates , i am looking for a home and contents and car insurance
    I am unsure of where to start
    i have tried compare the markets and i select but it is so confusing.
    I have a house which has never been insured before and a new kiorio2015 si car.

    1. Go and read some more and try to understand the content
    2. If you can't understand it and choose not to listen to the advisors and accountants then do so at your peril
    3. Make it a two way street and contribute back to the OZB community rather than spamming questions
    4. Stop making up hypotheticals that make as little sense as you do
    • momov3 on 10/05/2015 - 23:31
      +12

      He/she has been to a 'zillion' advisors and still doesn't get any answers. He's probably getting answers that he chooses not to like and does not fit his strategy. Either that,or he is as dumb as they come. So many of these questions you can find good advice even by googling! And is it 'remarkable' someone on $100K (wish i earned that) does not even know the basics of ATO's tax brackets and thresholds? You'd think someone who earns that money would take the trouble to find out FIRST before asking accountant since everyone (even the kid who earns $5 per hour at Macca's) wants to know how much mr Taxman grabs.

      • ozhunter on 11/05/2015 - 00:02

        The 100k income was just used as an example.

        • momov3 on 11/05/2015 - 00:07
          +4

          Exactly. So why use a hypothetical example if you really need proper advice? Surely the advice given will differ for someone on a $40K income for whom property investment and negative gearing may not be such a viable option, as compared to someone who is earning $100K and for whom negative gearing is a viable option on a higher tax rate. Even if you are 'fishing' for info, the advice given may be inappropriate as it's not relevant to your circumstances.

        • xuqi on 11/05/2015 - 14:16

          To pay ~50K in tax, you'd need an annual income of $160K+

          Even then, any 1/2 decent accountant would be able to write off expenses and reduce liabilities.

          If the accountant has already done all that(Car, office, travel, sundry expenses) and you still have a bill of ~50K, then by all means go-ahead and pay the bill, as the ATO don't care much about your feelings.

          "I have asked him some tax minimisation strategies and only thing he said was put more money in super combine super with partner and or buy a negative geared property , having a family trust"

          Those are some pretty decent options he's given you.

          I have been using options 3 & 4 from the list you were advised on. Works very well.

        • xuqi on 11/05/2015 - 14:18
          +1

          @momov3:

          Because the $100K 'Hypetheical' figure, makes the OP look better.

          His actual income is far higher than $100K, if he's getting taxed $50k.

        • momov3 on 11/05/2015 - 14:23

          @xuqi: OK then, OP's income is higher than 100K, owns an ABN business (lucky lucky) and only now at this stage OP is asking basics regarding his/her options in reducing tax.. And even worse still, he/she seems to be seeing a really incompetoe accountant who has no 'creative' ideas to share, so much so he has to ask a public forum on what is supposed to be very very important financial management and tax minimisation issues! Go figure.

        • ozhunter on 11/05/2015 - 16:47

          @momov3:

          Exactly. So why use a hypothetical example if you really need proper advice?

          I agree

        • StalkingIbis on 11/05/2015 - 20:57
          +1

          @momov3:

          hes a dentist…probably a little embarrassed to go posting on here to a bunch of tight pants about how much he makes

          and, this forum is full of money wise people, so where better to go to get advice then a collective group of people who would have looked down these avenues before?

  • Davo1111 on 11/05/2015 - 04:53
    +1

    Please, you're not even near the highest tier

    get a non shit accountant

  • coolfriendjoachim on 11/05/2015 - 09:58
    +8

    I have a peculiar scenario

    I don't think you know what peculiar means, friend

  • rmamila on 11/05/2015 - 10:13
    +1

    I am around the same income you are on. I have a family with 2 kids. No centrelink benefits as my family income (including 40k my wife earns from a full time office job) barely makes it to the threshold that centrelink stops benefits. I am paying around 28k a year for tax just for my income. I feel the Tax I pay is fair for my income as I am using the infrastructure of the country build from the tax I pay.
    If you earn 100k there is no way you pay 50k for tax. It is half of that and if you use the infrastructure of the country for free then then you shouldn't feel bad paying that tax. When you make more income your tax should go up obviously.
    If your Accountant told you that you are gonna get 50k tax bill then that's not correct and you should go to a different Tax accountant as many of the guys above have suggested.

    • [Deactivated] on 11/05/2015 - 16:40

      Interesting argument. Based on this why do we have tolls (In Sydney) ? If I lived in Wollongong it would cost me nothing to travel to the CBD. If I live in Castle Hill I pay a toll on the M2, Lane Cove Tunnel, Harbour Bridge to drive to the CBD. If I live in Blacktown I also pay a toll on the M7 to travel to the CBD. Just asking :)

      • tomclancy on 11/05/2015 - 16:56
        +1

        Toll roads are not owned by the government. They are owned by private companies that build them so they can generate income (profits) from charging tolls. Your taxes don't go towards building toll roads…. well maybe indirectly but that's for another post.

        If I live in Blacktown I also pay a toll on the M7 to travel to the CBD.

        It's entirely your choice to travel on the private toll roads and pay the fee. Public roads are available to you, but you choose not to use them. From Blacktown you can get to the CBD using the M4 at no cost. That is a public road.

      • cloudy on 11/05/2015 - 21:17

        There are toll roads in Melbourne in too, but I just choose not to use them. When I go on google maps, I just untick tolls. Takes me around 15 mins from west to east, but hey, I choose not to use it.

        These roads are prodominately funded by private, so they create extra options for the people to use. The public still has a choice.

        • rmamila on 14/05/2015 - 16:10

          I do the same except when I travel to Airport to catch a flight.

  • [Deactivated] on 11/05/2015 - 11:11
    +1

    If you work hard, you pay more taxes true. However, that is still only a percentage of that income. If you feel the remaining percentage is worth it for the work you put in (most do), go ahead and work hard for it. No what you feel is unfair is entirely your opinion. It doesn't matter as long as you do everything within the limits of the law.
    It is probably not addressing the problem for you when people say "move to another country if you don't like it here" and I'm sure everybody who has complained must have heard this retort thousands of times. Unfortunate but you can't really change anything about the law, and the real practical answer is to look for the best environment that is available to you. Look at it not only in terms of tax rates, but every single facet of life in a country. The practical answer would be "if you feel that the upsides is not worth the downsides of any place that is AVAILABLE to you, move to the next better place that you prefer".
    You can't have everything you want unless you are earning millions a year and be able to exert an influence in the law of your surroundings.

  • Miss Dior on 11/05/2015 - 20:09
    +3

    Be grateful you didn't live through the Malcolm Fraser era of 60 cents in the dollar top tax rate. Of course, back then, if you were self employed there wasn't superannuation to lower the rate either. Then you reach your 80s now and you've only got savings (no super) on which you get a low 2% interest on money you've paid 60% tax on!! Top it off with the government perpetuating the view that after living through the Great Depression, WWII, and loss of a generation of family due to WWI, you are a "burden" on the country. After what that generation have lived through I am loathe to complain about super and 50% tax. Don't blame you for trying though. Real estate seems a good way but I would wait for the inevitable crash, especially in Sydney.

    • BartholemewH on 11/05/2015 - 20:29
      +1

      I used to wait and wait and wait for the crash too. With the values of friends properties increasing at a rapid rate I realised that it is completely against the government's interests to let the market crash so I bit the bullet.

      • Oddmog on 11/05/2015 - 20:52

        Hit the nail on the head there. Capital interest just means more tax for them and even if the cities are unlivable due to no one being able to actually comfortably find a place to live they're addicted to the revenue.

        Thing is though, the crash just might happen between the mining sector and automotive sector making an exit but even at half the price Sydney would still be rather expensive. Lot of folks here on decent money but a single income of 50k is going to struggle even if they still have a job.

        • mrmarkau67 on 12/05/2015 - 09:54
          +2

          decent money but a single income of 50k is going to struggle even if they still have a job.

          The government has a scheme for people of ages 17+ to assist with financial planning, resource maximisation, mental health, tax minimisation, retirement planning, and estate planning.

          It's called "marriage". If this scheme is unavailable to you, start lobbying your local member.

        • Miss Dior on 12/05/2015 - 21:50
          +1

          @mrmarkau67:

          I'm not sure how to take your comment. I'll just say that I am saddened by the loss of value placed on marriage by society these days. People are so shocked when I speak of family members who have been happily married for close to 60 years. They smile when they see them walk hand in hand. It's sad when marriage is more motivated by finances than caring and a desire to spend a lifetime together.

        • mrmarkau67 on 12/05/2015 - 23:35

          @Miss Dior:

          I'm not surprised people are shocked. People who married 60 years ago were the worst generation for divorce in Australia. Divorce peaked in 1976 and has been going down ever since.

          http://www.theage.com.au/victoria/australian-divorce-rate-lo…

          People these days are getting married later and staying together more. Marriages with children are staying together more. Spousal abuse is being treated more seriously. Forced marriage is down; only the people who want to get married are doing so, and they are doing a better job of it. And soon even more people will be able to marry for love.

          So I think marriage is in a better place now that at any time in the past.

          Marriage for love, like vaccination and bicycles, is a wonderful invention of the modern world. The idea of a woman selecting the man she wanted to marry based on love (and vice versa) would have been incomprehensible to most people born before 1800. http://www.livescience.com/37777-history-of-marriage.html

          And it makes paying off your mortgage easier.

  • j5ive on 11/05/2015 - 21:12
    +2

    I can feel the pain of the op to some extent. The roller coaster of being a sole trader takes its toll. I'm year three of my retail business as a sole trader and we have had constant growth. Up and down we go with the tax man.

    The tax we pay throughout the year has never covered my personal return come July. I keep the payments at the recommended level from the ato on the bas as I am told there are sizeable penalties if you get it wrong. Correct information?

    We look to become a trust next year to minimise tax. I have however been told that we need to pay gains tax on the value of the business that the trust buys it for. Can anyone tell me how this value is determined?

    The most frustrating bit is when you hear how little tax the big corps pay. That just boils my blood. Especially when the public doesn't know and it isn't a factor in their purchasing decisions! RIP small retail business.

    • j5ive on 12/05/2015 - 09:11
      +1

      Anyone here help with my questions above? Cheers

      • mrmarkau67 on 12/05/2015 - 09:48
        +1

        I'm sure some people would know how this is calculated, but really this question is better answered by your accountant.

        • sickllama on 12/05/2015 - 21:08
          +1

          Agreed. Jive's scenario is too specific and complex to give general advice. Any worth while advice would take research (and probably more questions for Jive to completely understand the application of the law to Jive).

  • teaBagger on 11/05/2015 - 21:20
    +1

    No way should you pay 50K on 100K.
    Should be more like 30ish max.
    Sack your accountant.

    If you are a sole trader you should be claiming every car expense and have updated your car so you have deductions. Claiming home expenses, mortgage interest, power water, internet, phone, netflix…

    I am a engineering design draftsperson and made about $150k last year and paid about half your burden from memory.

    Earning more to cover tax burden doesnt work.

    Dont pile cash into super while you have a mortgage. Super is only going to be whittled away by the government sooner or later…. Paying off the mortgage is the best thing you can do.

    Sack your accountant.

  • nikey2k27 on 12/05/2015 - 00:37
    -3

    Do you have wife and kids ?Why i ask this what people who have kids and wife get all TAX back. Centrelink payments Childcare payment. No kids people like my self that pay all the TAX get none of it back.

  • Tarnos on 12/05/2015 - 08:51
    -3

    If you are really worried about just tax, and you have indicated you are a sole trader working on ABN, you should look into converting your business structure to a company. There are other fees and complications, but there is a lot more a company can do tax-wise than a sole trader.

    Also, the tax rate is only 30% for companies going to 28.5% in July.

Login or Join to leave a comment
Login Join