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Get RSM on your side at tax time.

Are you paying too much tax?

By Advertising Feature - 15 August 2011 59

pam dean

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.

There are all kinds of ways to create genuine, legal tax deductions while actually spending more to improve the quality of life… and having lots more fun.

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.

What’s Your opinion?


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59 Responses to
Are you paying too much tax?
Classified 1:06 pm 15 Aug 11

I pay waaaaay too much tax.

essfer 1:00 pm 15 Aug 11

Sean said :

Meh. It’s still totally misleading to include indirect taxation like that. And saying the average Australian pays over half their income in tax is just plain wrong.

You’ve gotta be trolling? How is it “misleading” when the OP has clearly explained the method of calculation? I haven’t checked the maths but it at least sounds plausible that I am spending more than half my income on tax, regardless of the ‘source’. Even costs like parking fees and penalties, vehicle registrations, licencing, bus fairs – it all goes into consolidated revenue to be squandered on s*** I didn’t ask for.

Either way, the premise of the post is introducing a way to minimise your tax spend, so arguing the semantics of what comprises a “tax” is a moot point in the overall context.

TSI 12:53 pm 15 Aug 11

boneymaloney said :

(from the website) “FREE CHAPTERS OF THE BOOK THE TAX OFFICE DOES NOT WANT YOU TO HAVE”

Pig’s arse, the ATO couldn’t give a fig for your tax minimisation strategies. They aren’t a corporation and don’t care how much tax they collect as long as they collect exactly as much as they are entitled to, not a penny more nor less. These strategies are all on the ATO website, if you want to grind through a few thousand pages of tax law.

You’re right. The ATO doesn’t have to give a fig about your tax minimisation strategies – you do. They will gratefully accept all the money you want to give them.

L_Observer 12:49 pm 15 Aug 11

As the OECD tax database demonstrates (http://www.oecd.org/document/60/0,3746,en_2649_34533_1942460_1_1_1_1,00.html), the paragraph below is patently untrue.

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.

If the above paragraph is a demonstration of Pam’s research skills, perhaps that explains why she no longer works for the ATO.

p1 12:48 pm 15 Aug 11

Sean said :

Meh. It’s still totally misleading to include indirect taxation like that. And saying the average Australian pays over half their income in tax is just plain wrong.

I tend to agree. But more then that, it is meaningless to talk about how much one country pays in tax relative to another without some sort of comparison of what you get in return (healthcare, roads, police, defence, garbage collection, food standards, etc).

I wonder some times why we *do* need to pay some much personal income tax relative to other countries. Personally I think we should get more (as a nation) from the profits of digging dirt out of our continent….

Sean 12:11 pm 15 Aug 11

plt said :

Do you guys purchase anything? Tax is on just about everything, not just on our pay, and it is obviously what the author is basing their figures on if you read the article. GST and excise are taxes and you pay these on just about everything we buy and count towards the tax we pay to the government. If you don’t pay any GST or excise then you musn’t buy groceries or fuel or use other people’s services like a mechanic, dentist or anyone else who has to charge GST. What about stamp duty you pay this when you purchase a house, a car? Aren’t these all forms of tax? Besides, isn’t reading material written by some someone else easier than reading through thousands of pages of complex legislation yourself? I like getting money back at Tax Time, the more the better!

Meh. It’s still totally misleading to include indirect taxation like that. And saying the average Australian pays over half their income in tax is just plain wrong.

plt 11:55 am 15 Aug 11

Do you guys purchase anything? Tax is on just about everything, not just on our pay, and it is obviously what the author is basing their figures on if you read the article. GST and excise are taxes and you pay these on just about everything we buy and count towards the tax we pay to the government. If you don’t pay any GST or excise then you musn’t buy groceries or fuel or use other people’s services like a mechanic, dentist or anyone else who has to charge GST. What about stamp duty you pay this when you purchase a house, a car? Aren’t these all forms of tax? Besides, isn’t reading material written by some someone else easier than reading through thousands of pages of complex legislation yourself? I like getting money back at Tax Time, the more the better!

cross 11:36 am 15 Aug 11

“and toys for adults…” Really

Sean 11:31 am 15 Aug 11

“The average Australian works more than six months of the year just to pay the tax man!”

Not even slightly true. Tax revenue as a share of GDP is barely over 30%. Logically that would suggest that the “average” Australian could not possibly be paying over 50%.

Add to that, the 37% bracket for income tax doesn’t apply until $80000, and the top rate of 45% doesn’t apply until $180000.

Meanwhile, the median hosehold uncome is about $67 000. A single person, living alone, s accessing a typical Australian’s standard of living if they’re getting 36000 per year, according to this: http://www.abc.net.au/unleashed/2614076.html

Ben_Dover 11:14 am 15 Aug 11

Wow! Free money, can I have some too?

How about we exchange some for this bridge I have for sale.

boneymaloney 10:59 am 15 Aug 11

(from the website) “FREE CHAPTERS OF THE BOOK THE TAX OFFICE DOES NOT WANT YOU TO HAVE”

Pig’s arse, the ATO couldn’t give a fig for your tax minimisation strategies. They aren’t a corporation and don’t care how much tax they collect as long as they collect exactly as much as they are entitled to, not a penny more nor less. These strategies are all on the ATO website, if you want to grind through a few thousand pages of tax law.

TSI 10:54 am 15 Aug 11

ace2279 said :

This sounds great but where’s the practical info on how/where this info exists and how we can learn to do it as well? Would be great to have a link or similar 🙂

Check out http://www.taxsavings.com.au. Main website still under construction. Or email Pam on pam@taxsavings.com.au. This is simple stuff once you know how and everybody can do it.

Jazz 10:49 am 15 Aug 11

Have updated the story with a link to Pam’s website Ace2279.

mendoza 10:35 am 15 Aug 11

“You work long hours and you end up losing most of your pay in tax”

False. Stopped reading after this.

ace2279 10:30 am 15 Aug 11

This sounds great but where’s the practical info on how/where this info exists and how we can learn to do it as well? Would be great to have a link or similar 🙂

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