101 Ways to Save Money on Your Tax - Legally! 2022-2023. Adrian Raftery

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Название 101 Ways to Save Money on Your Tax - Legally! 2022-2023
Автор произведения Adrian Raftery
Жанр Личные финансы
Серия
Издательство Личные финансы
Год выпуска 0
isbn 9781119883180



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he/she would pay $23 500 in tax and Medicare levy. If an investor with no other income had a $100 000 capital gain he/she would pay $5967 — a saving of $17 533.

      

PITFALL

      Any tax benefit derived by transferring an income-producing asset from one spouse to another may be lost if there is CGT to pay on assets originally acquired after 19 September 1985.

      

TIP

      If you do not have a spouse, or you are both in the highest tax brackets, consider creating an investment company that is taxed at a flat rate of 30 per cent (reducing to 25 per cent if your company derives at least 20 per cent of its income from non-passive sources and has an annual turnover below the small company threshold of $50 million) for all income.

      The dependant (invalid and carer) tax offset (DICTO) is only available to taxpayers who maintain a dependant who is genuinely unable to work due to carer obligation or disability.

      

TAX FACT

      The DICTO has consolidated the following tax offsets:

       invalid spouse

       carer spouse

       housekeeper

       housekeeper (with child)

       child housekeeper

       child housekeeper (with child)

       invalid relative

       parent/parent-in-law.

      The ATO may deem you eligible for the DICTO if the following applies:

       you contribute to the maintenance of your spouse, your parent (or your parent's spouse), your child (aged 16 or over) or siblings (aged 16 or over)

       your dependant was being paid either:a disability support, a special needs disability support or an invalidity service pensiona carer allowance for a child or sibling aged 16 or over

       your adjusted taxable income as the primary income earner was $100 000 or less

       your dependant's adjusted taxable income was less than $11 614

       you and your dependant were Australian residents (not just visiting).

      If you satisfy the above and your dependant's adjusted taxable income was $285 or less and you maintained him or her for the whole year, you can claim the maximum dependant (invalid and carer) tax offset of $2833.

      

PITFALL

      The DICTO is reduced by $1 for every $4 that your dependant's adjusted taxable income exceeds $282.

      

TIP

      You may be able to receive more than one amount of DICTO if you contributed to the maintenance of more than one dependant during the year, including if you had different spouses during the year.

      

TAX FACT

      The ATO defines your ‘adjusted taxable income’ as the sum of the following amounts, less any child support that you have paid:

       taxable income

       adjusted fringe benefits

       tax-free pensions or benefits

       income from overseas not reported in your tax return

       reportable super contributions

       total net investment loss for both financial investments and rental properties.

      

EXAMPLE

      Marlene and Saxon are married. Marlene is genuinely unable to work and has no salary or wage income. They have rental properties and a share portfolio. Saxon has also entered into a salary-sacrificing arrangement to boost his super. His taxable income is $130 000 after claiming a total net investment loss of $18 000. He has reportable super contributions of $17 000.

      Saxon's adjusted taxable income is $165 000 ($130 000 + $18 000 + $17 000). As Saxon's adjusted taxable income is over the income threshold for this offset ($100 000) he is not eligible to claim the dependant (invalid and carer) tax offset.

      Source: © Australian Taxation Office for the Commonwealth of Australia.

Taxable income Tax on this income
$0–$416 Nil
$417–$1307 66c for each $1 over $416
$1307 and over 45% of total income

      

PITFALL

      Minors under the age of 18 are taxed at the highest marginal tax rate for ‘eligible income’ (such as interest, dividends and trust distributions) over $416 per annum.

      

EXAMPLE

      Louie is 17 on 30 June. He earned $8780 from a part-time job. He also received $920 in interest from money he had saved over the years from gifts. Therefore, he has an excepted income of $8780 and is entitled to the tax-free threshold of $18 200 for this income. He also has eligible