With 96% of all OzB’ers earning over 190k, I was wondering if any of our esteemed money-baggers actively worked to reduce their tax bill, and if so, what?
Novated leasing an EV seems like a pretty decent deal these days, but are there any other LEGAL avenues that you’re currently using?
I promise I’m not from the ATO.
That only works for a little, then I got hit with Division 293.
Still works after Division 293, just less so.
As mentioned above, max out your $30K super contribution.
Taking out a novated lease just to reduce tax is something a leasing company says
Maxing out contributions works for lower tax brackets (or those who have just made across the line into top bracket). If you're earning big numbers (and getting the 11.5% in super) you'd likely only be able to SS $2-3k into super before maxing out your cap…
yep it sucks, you think you have finished your taxes then you get your Div 293 tax bill. You would think the ATO would be smart enough to work this shit out when you put your tax return in rather than later.
Yup above the max pre tax contrib base, they get you with div 293 anyway, the voluntary contribution also adds up to your ATI which can play havoc with CCS and any centrelink benefits if you are not careful , if someone has been earning decent for last few years, they likely wont have much of the carryover amounts anyway.
EV, Super, Meal entertainment, $16k+ Fringe benefit.
Maximising pretty decent. Ended up utilising at least half.
Family trust, donations to charities.
Pre-paying payments on a business loan this year, as I’ll mostly be travelling next year and wouldn’t be earning much anyways.
Investment properties mainly negative gearing and depreciation reports. General repairs etc always add up are tax deductible. That would be the bulk of my refund.
The rest comes from WFH arrangements and cost sharing utilities and equipment etc used to support the home office.
Spouse super co-contribution for when MrS Paint wasn't working. I get a tax refund and her super goes up. Win win.
Isn't that capped at 1K pa? (or thereabouts?)
I think its only an offset of $360 or so, plus spouse loses her eligibility for the government co contribution for super ( $500 max), the government co contrib is much better is spouse is on low income
Not sure. Haven't claimed it in 15 years. Maybe it was more lucrative back then.
Leverage leverage leverage
Retire early.
Split income.
Defer CGT if sensible to do so.
Super.
Income splitting is a thing in Australia?
If you have discretionary sources of income, like a family business, investments etc.
I called ato and told them i'm a sovereign citizen. Never had to pay tax anymore
/s
With 96% of all OzB’ers earning over 190k
Woweeee. Feels bad to be poor.
Nah. They count their crypto profits which they never sell.
Where is that OzBer who put their pay check into crypto. Then put it in Voyager / Celcius and got a loan against it to live on. Die with a load of debt but don't have to pay CGT. Then Voyage and Celcius went under and they went missing.
Rekttrading, who lacked a basic understanding of the tax rules and hadn't done the maths on what sort of returns you would need to leverage to consistently borrow against the same investment.
Luckily neither of these issues prevented them from telling us all how it all worked and what "the feds" were able to do.
Rekttrading was last seen touring the speaker circuit of Outer Find Out.
Check whether you have carry over for super contributions (up to 5 years) if you have less than $500k super balance.
ATO link https://www.ato.gov.au/individuals-and-families/super-for-in…
There are only two that have any real significance for the general punter … max out your concessional superannuation contributions (although with your employer already plonking in around two-thirds of the limit, the upside is limited from a tax perspective), or have negatively geared investments.
I invest in the Australian film industry.
Onlyfans?
@Shrynx
Over to you. ♥️ Your favourite edgelord.
No, hon. Good try! But of course you don't understand so I'll explain it slowly to you. This is a joke directed at a non gendered person and does not use gendered sexist stereotypes to be 'funny' or edgy. The OnlyFans platform is a video, or 'film,' platform, that is being humerously linked to the Australian film industry, which was mentioned in the comment above. Unlike the 'joke' from yesterday, this joke is related to the original comment in a way that doesn't rely on sexism or misongony to be 'funny'.
There is nothing inherently wrong with OnlyFans or sex work if all adults consent.
I am not going to engage in a discussion with you about this because you are clearly acting in bad faith. Tagging me in any more threads like this will result in me reporting you for harassment as I am now being clear that I do not want to interact with you going forward. I find you abhorrent.
Again, I do not want to engage with you any further.
Trying to put the pieces of this puzzle together to get some context…what was said in this deleted thread? https://www.ozbargain.com.au/comment/15679242/redir
what do you do to LEGALLY reduce your tax bill?
Base yourself in Monaco
Novated leasing an EV seems like a pretty decent deal these days
🤣🤣🤣
EV novated leases is the biggest middle-upper class tax break available in this country. I seriously don't get the OzBargain hate for it.
It's not really a tax break… Do the maths…
I did. It is a massive saving over purchasing outright. For me it was cheaper to buy a new EV than a used Corolla when accounting for the fuel savings.
@jv: The entire car is tax deductible for a business. It's why being able to pass that on to an employee without FBT is so incredibly valuable.
@jv: You love that emoji, don't you?
That's all this is, salary sacrificing for a vehicle so there's no GST, no FBT and none of the usual requirements.
The company gets a deduction for paying the salary, the employee saves the GST and doesn't pay any income tax. It's the same thing, only you're too daft to see it.
I happen to have done lots of maths in this area, and can positively confirm that EV novated lease is significantly advantageous for top tax bracket earner (as long as they are aware of a few caveats).
https://www.reddit.com/r/AusFinance/s/VHJ25VpNKu
What's your maths that contradicts my finding? Keen to hear back.
@changyang1230: You're wasting your time trying to reason with JV. Once he thinks he's right facts don't matter.
@bobswinkle: More for the benefits of other passing readers who are interested in actual maths I guess.
To be fair there's quite a few trapping of NL that many people fall for / did not consider when they sign up.
- headache when losing / changing job
- failure to consider balloon cost
- failure to consider the impact on childcare subsidies / HECS etc
- failure to consider reduced borrowing capacity for house etc.
- got hit by reduced super guarantee (happen to a small proportion of people, most people aren't affected)
etc
- not realising the big difference FBT exemption makes compared to FBT-applicable era when NL actually was NOT that beneficial.
Yeah, this is very true. I went through the headache when changing a job, took a couple of months to get it all sorted out because the NL company is awful to deal with. Paying the loan during that time wasn't nice. Fortunately there were no other costs though, so it could have been worse.
And what the NL company gave me as a "savings" calculation was laughably bad (then the pressure to sign up to other costs, not use my own insurance, etc). Anyone thinking about it should definitely use your calculator. I wish I had that rather than doing my own.
@freefall101: The typical saving figure they give is generally on point of reference of “compared to taking up 12% car loan” lol (or whatever interest rate is underneath the hood of the lease)
To reduce your tax bill means you have to be out of pocket.
Not necessarily.
Trusts, foundations, holding companies, routing business transactions through ireland, panama, caymans, resident for tax purposes in the principality of monaco, diplomatic immunity, sovereign.
Lots of investment properties….its the Aussie way
Anyone here just straight-up raw dog it and claim nothing?
The things i do:
- Max out Super contribution
- Spouse contribution (my wife works part time and on a low income)
- WFH expenses
- Negative Gearing on Property (but i hate this)
- Some year negative gearing on Shares but shares return is pretty good.
- Shift your assets to lower income partner i.e. your shares so your dividends or CGT won't be taxed that high…
I think those are the only things worth doing. There are ways to do with trust and what not, but if you don't have the scale, the cost of maintaining it is quite high, maybe it will eat up all your saving.
I
Depends on the source of your income, trust and family distributions are the best but are not possible to do on a PAYG salary (and just be careful with adult kids these days)
I miss living in a country with income splitting, my tax refund was awesome. Excellent way of encouraging people to have more kids too, assuming we ever have the houses to put them in.
Nice try 🤣
Move yourself and your money offshore. That is the only way.
Yes. This. Just make sure you don't get taxed on worldwide income. There are ways to do it but best not disclosed in this forum.
I have some family trusts so I can redistribute where and when is suitable.
What about the 4% of us that earn nowhere near that amount?
Username checksout.
There are tips shown here but I can tell there are quite a few that aren't disclosed here as well. The wise ones throw a few bikkies and kept the cake to themselves.
(ie: OP, look elsewhere other than this forum)
There's one trick that the tax office can't get you on and is my favourite. It simply involves doing whatever you possibly can to earn less money. I achieve this mostly by working less hours and sometimes by taking on lower paid jobs that are more enjoyable.
Primary producer - https://www.ato.gov.au/api/public/content/0-87b17d09-0938-47…
https://www.hrblock.com.au/tax-academy/tax-advice-for-farmer…
Spread your tax liability over multiple years
Farm Management Deposits
School pickup 4wd is now a work vehicle
96%?
Isn't this the very reason why ppl earning $250,000+/year (esp the ones above $500k+) … pay financial consultants for ???
Financial consultants do all the heavy lifting (+ find loopholes/exploits/etc) … and you generally only meet with them every 6 months in person (but may have informal contact more often).
I don't exactly know … As I'm only in the $100,000 - $120,000 area (depending on OT).
Anyone on even $250,000+ "should" be consulting a professional financial consultant … They are worth their weight in gold.
Max out super contributions