You go to work every day. You work long hours and you end up losing most of your pay in tax. Australians are among the highest taxed people in the world and its getting worse every day. The average Australian works more than six months of the year just to pay the tax man! Not only do you pay income tax but there are all those hidden taxes as well: GST applies to almost every purchase and there are additional taxes on petrol, cigarettes, alcohol, cars, etc. In fact, up to 69% of the average Australian’s income goes in tax. And now the flood levies and possible carbon taxes too. We are hurting!
Whether you agree that the country could be run better or not, the fact is that most Australians are concerned with accumulating sufficient wealth to enjoy life and fund a comfortable retirement. There are only two ways to increase wealth: increase your income or reduce your outgoings.
If you are a typical Australian, taxation represents one of your most significant outgoings—most likely your largest, in fact.
Fortunately, tax is an outgoing that can, in most cases, be readily reduced with a little knowledge and strategic planning, resulting in big savings. Being a poor man who controls wealth is far preferable to being rich and over-taxed.
How do I know this stuff?? I’m a former ATO Tax Fraud Investigator. I have seen many illegal ways to reduce tax. And I’ve seen many of those people jailed or made bankrupt by the ATO.
I figured there had to be a way to reduce my tax too, but do so legally – after all, the rich do it. It’s your right to minimise your tax, just make sure you do it honestly and legally.
For example, I travel extensively. Even though I am a PAYG wage-earner, many of my travel costs — both domestic and international— are tax deductible. The ATO helps me to fund my reading, attendance at training seminars and the purchase of certain CDs and DVDs. You just need to know the rules.
He helps fund my electricity and telephone services; household maintenance, my internet connection and computer costs; and dozens of other comforts I can purchase with tax free income! I can even claim the interest on my home loan. Can you?
In certain circumstances, the ATO will subsidise the cost of caring for and feeding the dog. Tradies love this one when they use their guard dogs to guard their tools and trucks when left unattended.
Certain gifts to friends and family can result in tax savings, and yes, even your wine and toys for adults…
Protect yourself from being sued or from failed relationships – business or personal. NSW is said to have the third highest number of lawsuits per capita in the world and Victoria is close behind. California tops the list. A Californian resident is likely to be sued at least four times in a lifetime so figure out the chances of a suit if you live in NSW or Victoria!
The divorce rate is currently at 40% and second and third time marriage and relationships are now the ‘norm’. It sounds cynical but think about locking your assets away before losing another house!
Don’t make the mistake of thinking you are an unlikely target. Our legal system makes it far too easy for people to mount dishonest attacks on anyone with assets. They manufacture a grievance, find a lawyer to take their case on a ‘no win, no pay’ basis, and sue.
Poor men are rarely sued. You can’t lose your wealth in a predatory legal battle if you have none to lose! Controlling income-producing assets — rather than owning them — protects you from those predatory law suits.
Avoid the mistake of thinking you don’t earn enough to bother with tax saving strategies. The only people who don’t need to pay attention to tax minimisation strategies are those who feel a moral obligation to pay more than their fair share of tax!
The world’s wealthiest citizens pay minimal tax and secure their assets in entities that provide security and tax benefits. You can too, if you know how.
Learn the benefits of working in company and trust structures, learn to negatively gear and reduce capital gains tax. Live in your investment property and make the loan deductible against your PAYG. Yes, you can do it and it’s all 100% legal.
Travel the world as a tax deduction and claim self education expenses. Getting an 18% to 45% off sales fare each time you travel sounds good to me. That’s not only on your flights, it’s also on your accommodation, meals, course costs, taxis and other relative bits and pieces. I do – and all as a tax deduction!
You can too. You just have to know how and how to do it legally. Tax can be fun. Like anything else, you just have to learn how to play the game properly.
To learn more, download two free chapters from Pam’s book Tax Secrets of The Rich.
Update : You can purchase Pam’s new book or download the first couple of chapters from Pam’s website here
Pam Dean is the owner of http://taxsavings.com.au/ where she provides up to date tax minimisation tips and resources that the Australian Tax Office does not want you to have.