if you drive in excess of 10,000kms for work/business purposes, keep a log book. u'll be able to claim as a deduction costs incurred like registration and services. if not, use public transport b/c it's cheaper in the short run & long run too b/c your car benefits! otherwise, it's calculated on a cents per km basis whereby the size of your engine determines the cents per km.
even if you don't do salary sacrifice for your car, laptop etc your tax agent will work out depreciation that you can claim on all assets you use for your job plus lease payments if you go through finance. all is deductible. again, keeping a log book is best.
its not professional to attempt to increase refunds though. so bear in mind the quality of the tax agent you choose. if they answer yes to all your questions, they probably aren't credible.
even if you don't do salary sacrifice for your car, laptop etc your tax agent will work out depreciation that you can claim on all assets you use for your job plus lease payments if you go through finance. all is deductible. again, keeping a log book is best.
its not professional to attempt to increase refunds though. so bear in mind the quality of the tax agent you choose. if they answer yes to all your questions, they probably aren't credible.
salary sacrifice a car, laptop, anything that you can get that's related to your industry. Even books related to your line of work for extra development can be claimed. Speak to your employer - some workplaces allow you to get paid less and take more leave, essentially you are paying to get more leave.
Be wary of the ING, Bankwest and other high compound interest accounts as the interest you earn will also get taxed at the end of the year. Gotta love our tax system - you get taxed for knowing how to save :S
Be wary of the ING, Bankwest and other high compound interest accounts as the interest you earn will also get taxed at the end of the year. Gotta love our tax system - you get taxed for knowing how to save :S
What I'd like to learn is how to avoid paying Capital Gains Tax, it can be rather complicated I'm told.
with property, you are liable to pay capital gains tax only in the financial year you sell it. otherwise income from rent net of expenses incurred are classified as simply income. there are limitations as to what forms the basis of your capital costs upon sale of property. for example all legal fees incurred aren't included. for example, if your tax agent has depreciated stamp duty over previous years, then it won't be included in your capital cost base.
There are 3 methods in theory that can apply. Indexation method takes in to account CPI and is applicable if property was purchased prior to mid-late September 1999. Discount method applies for purchases after September 1999. The other method applies if you did not own the property for more than 12 months. Generally, in practice the discount method is applied to property. Basically, you deduct from your capital proceeds the cost base and you apply a discount rate which is 50% provided you have no capital losses. You pay tax on the dollar amount at your tax bracket rate.
The discount rate of 50% on capital gains is particularly attractive for investing in property or stocks.
Hope that helps, otherwise you can always call 1800taxman!
There are 3 methods in theory that can apply. Indexation method takes in to account CPI and is applicable if property was purchased prior to mid-late September 1999. Discount method applies for purchases after September 1999. The other method applies if you did not own the property for more than 12 months. Generally, in practice the discount method is applied to property. Basically, you deduct from your capital proceeds the cost base and you apply a discount rate which is 50% provided you have no capital losses. You pay tax on the dollar amount at your tax bracket rate.
The discount rate of 50% on capital gains is particularly attractive for investing in property or stocks.
Hope that helps, otherwise you can always call 1800taxman!
I think our tax system works quite well economically and is socially just compared to other countries. It's all about ensuring we are equipped for our ageing population and minimising doll bludgers!
Can't avoid tax and death I suppose :)
Can't avoid tax and death I suppose :)
Think about this the next time someone complains that the rich people get
the lion's share of a tax cut.
Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the
arrangement, until one day, the owner threw them a curve. "Since you are all
such good customers," he said, "I'm going to reduce the cost of your daily
beer by $20."Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the
first four men were unaffected. They would still drink for free. But what
about the other six men - the paying customers? How could they divide the
$20 windfall so that everyone would get his 'fair share?'
They realized that $20 divided by six is $3.33. But if they subtracted that
from everybody's share, then the fifth man and the sixth man would each end
up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to
drink for free. But once outside the restaurant, the men began to compare
their savings. "I only got a dollar out of the $20,"declared the sixth man. He pointed to
the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too.
It's unfair that he got ten times more than I!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get
anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down
and had beers without him. But when it came time to pay the bill, they
discovered something important. They didn't have enough money between all of
them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax
system works. The people who pay the highest taxes get the most benefit from
a tax reduction. Tax them too much, attack them for being wealthy, and they
just may not show up anymore. In fact, they might start drinking overseas
where the atmosphere is somewhat friendlier.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
Source: Adrian Raftery
the lion's share of a tax cut.
Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the
arrangement, until one day, the owner threw them a curve. "Since you are all
such good customers," he said, "I'm going to reduce the cost of your daily
beer by $20."Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the
first four men were unaffected. They would still drink for free. But what
about the other six men - the paying customers? How could they divide the
$20 windfall so that everyone would get his 'fair share?'
They realized that $20 divided by six is $3.33. But if they subtracted that
from everybody's share, then the fifth man and the sixth man would each end
up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to
drink for free. But once outside the restaurant, the men began to compare
their savings. "I only got a dollar out of the $20,"declared the sixth man. He pointed to
the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too.
It's unfair that he got ten times more than I!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get
anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down
and had beers without him. But when it came time to pay the bill, they
discovered something important. They didn't have enough money between all of
them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax
system works. The people who pay the highest taxes get the most benefit from
a tax reduction. Tax them too much, attack them for being wealthy, and they
just may not show up anymore. In fact, they might start drinking overseas
where the atmosphere is somewhat friendlier.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
Source: Adrian Raftery
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