Hi all -
My company has done ok past few yrs, and sitting on a multi 7 figures profit in PnL
Business has slowed down substantially now, reaching a point where I am considering winding it down
Keen to hear opinions on how to draw down remaining profits without giving away over 30% back in taxes
I am personally in the highest tax bracket- are there any strategies to lower tax on dividend payout?
for every 1MM, below is the math i believe is the tax liability
To distribute 1million after tax profits as dividends
đ
Grossed-up dividend: $1,333,333.33
⢠Tax on grossed-up amount: $600,000
⢠Franking credits: $333,333.33
⢠Net tax liability: $266,666.67
⢠Medicare Levy: $26,666.67
⢠Total tax liability: $293,333.34
individualâs total tax liability, including the Medicare Levy, would be approximately $293,333.34
ââââââ
PS: I have consulted my accountant, he recommends I leave it in company account and drawdown once i no longer have income, which could be 20-30yrs down the line after retirement ?
keen to hear thoughts on this option as well!
If this is your recommendation, what should i do with the saving? Put that into an ETF/cd in company name?
Invest the cash in the company to buy something. Treat it like âsuperâ but without the restrictions.