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Any good books on tax?

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Tyler Durden

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I just came back from Borders looking for a good book on tax, something that provides tax tips for beginners and people who work the standard 9-5 job, but couldn't really find anything. Does anyone here know of any good books on tax minimisation (not avoidance)?
 
burglar said:
I googled and found this:
Click to expand...
Strategy 1, "Bring Forward Your Tax Deductions" is a bit of a silly one isn't it? One can only claim once so now or later, what difference does it make? Next financial year will be lean because all the tax deductions were made last year. The suggestion of an advantage eludes my perception.
 

Didn't say it was good??

See your point, but bring year 3 into 2, then 4 into 3 etc., until you retire rich, at age 33!
 
burglar said:
Didn't say it was good??
Click to expand...
Didn't say you did.

Why can't people see the financial system is set up to take purely from whatever the people will accept.


If you're clever or work hard can we tax you more? Yes Yes Yes please.
 

For example, if you have made a lot of extra capital in one year and don't expect to do so in the next, you bring forward all possible tax deductions to minimise your higher tax obligations that will be inflicted on you in that once-off event year (or whatever).
 
Wysiwyg said:
If you're clever or work hard can we tax you more? Yes Yes Yes please.
Click to expand...
After all there are plenty of people having babies, single with children, those that didn't bother to prepare for their ageing years and those that blatantly rort the "soft" Australian Government that distributes the working man's taxes.
 

I worked the 9-5 routine all my working life, but found the following invaluable to learn about over time to be able to minimise tax wherever possible and to use as I built more assets. As you indicate, it is all about minimising tax, not avoidance. Like most things it is easier to learn about boring stuff like this when you are actually investing or doing something practical with them.

1. Trusts
2. Company structures/tax
3. Property
4. Equities
5. Superannuation
6. Middle class welfare (Govt. benefits)
7. General claims

Companies and Trusts give you the vehicles to place assets into to minimise tax and reduce litigation liabilities; and in the case of Testementary Trusts, if you have kids maximise any life insurance tax benefits should you die (just for starters).

'Family Trusts' by NE Renton is probably as good as anything to start you off.

When you properly understand Super tax rules you can use it to minimise tax when you have capital gain liabilities and other opportunities, and if they change the rules again in the future as they have in the past, you can work some real PAYE magic with minimising tax and leveraging other benefits if you understand the rules when it happens.

'Superannuation for Dummies' by Trish Power has a fair bit in it from what I have seen reading in shops and this is her web site which is what I use: http://www.superguide.com.au/

Property and equities you need to understand for gearing purposes, allowable tax claims and tax inputs such as dividends amongst many others. There are Dummies books on tax that would probably be as good as anything to get you started.

In terms of middle class welfare, this is more something you have to learn about by going and asking questions of Centrelink if you are interested/have kids. There is heaps on the Web and ATO especially to read on the subject if you want to learn. Labor has clamped down a lot harder, but where there is a will there is likely a way if you do your research.

I used to get really piddled off with Kerry Packer many years ago for paying less tax than I probably did, until one day I realised all he was doing was using the Australian tax rules to minimise his tax to near zero legally. I actually learnt a lot by paying a couple of good finance advisors to teach me lots of tax minimisation tricks initially (until they could not teach me anything more and got sacked) and now mainly use accountants to fill any gaps.
 
Wysiwyg said:
After all there are plenty of people having babies, single with children, those that didn't bother to prepare for their ageing years and those that blatantly rort the "soft" Australian Government that distributes the working man's taxes.
Click to expand...
Yes yes, we know. Ours are nations of thieves.
However, since this particular thief is not just a lone thug that can be shot dead, but a big gang of thieves backed by armies of gun-wielding men paid with the loot, you might just have to get used to it...

You should read 'Atlas Shrugged', if you haven't already. The rough plot is the worlds intelligent, hard-working men run off, leaving the thieving society to starve and collapse. Most enjoyable read ever.
 

is bring your tax deductions forward talking about bring the tax deductions forward to your week to week salary.
let say you get a 30,000 tax deduction if you get that at the end of the year in one lump sum it looks good but had you got $576 a week instead well my knowledge of compound interest would suggest this would be much better for paying your debt off as you would have an extra $576 a week reducing your interest on your loan.

I'm extremely knew to property investment and haven't actually started doing this but i believe that is the idea.
 

That is another example. It is possible to get your PAYE tax reduced to smooth/increase cash flow for debt maintenance against eventual known tax credits, which is what I think you are indicating? Usually does more for immediate cashflow (amount of money you have available to pay the investment bills, etc) than compounding as it is an actual outgoing cost in that case, on a regular weekly/monthly basis.

A common way to bring tax deductions forward, using your example, is to pre-pay the interest in the prior year to when it is normally due in order to reduce the tax in the present year because you have a heavy tax burden this year. The aim is to minimise what you pay the ATO and maximise what is in your pocket.

So whereas you might be in a high tax bracket, by using the next year's tax credits you reduce this year's high tax liability more effectively by bringing it forward and therefore have more money in your hands compared to the ATO, as opposed to not doing it and getting a lesser overall return by using them in the next year.
 
enigmatic said:
I'm extremely knew to property investment and haven't actually started doing this but i believe that is the idea.
Click to expand...
Making weekly rather than monthly repayments reduces the interest payable on a loan so how would repaying daily go if the lender allowed it?
 

Wow thanks for that, it was really informative. I also had Kerry Packer on my mind as I made the original post. But I just had a thought - what is to stop me from creating a company used to do my trading/investing, and then buying my car under the company name so that it becomes an expense, rather than just buying it under my name and getting no tax benefit from it? That is the sort of information I am looking for in the book.
 
Did you check out this book?

http://www.moneybags.com.au/default.asp?d=0&t=1&id=6162&c=6&a=74

2011 Edition now available

Discover how the rich use company and trust structures to protect their assets and minimise their tax.

This book is a must for business owners and investors! Tony Melvin and Ed Chan have simplified and summarised everything you need to know about tax legislation in an easy, yet comprehensive guide.

Advice and information that can help you save money includes:
The difference between a company structure and a trust
The seven different types of trust and how to use them
Why you should rarely buy an investment in your own name
How to protect your assets from lawsuits, taxes and creditors
How you can pass your wealth on to your children and have it protected for generations
Why tax is a game which can be played by everyone, not just the wealthy
 

Thaaaaaaankkkssssssss, just what I was looking for!

I also recognise that author, he wrote that 'From Red to Black' book that I always see in the finance section of bookstores.
 

I was the perceived age of your avatar when I started really learning about finance. I was a lowly paid tradesman at the time with a house and debt and no idea why someone like Packer could pay very little tax and use to whinge about the Govt. and tax like the majority. I just thought laterally one day and decided that if he could do it so could I if I learnt what he did differently to the majority of the population who kept whining about paying excessive PAYG tax, but did nothing about it.

So, you can think small like the masses because you may have limited assets at this time and look like an aged version of your avatar at 65 and look and be no wiser, or actually challenge what you know and learn what the Packers of this world do and apply it to your own life and not whinge about tax and govt. as most people do all their life. There is a reason why most people are either dead or dead broke at 65; you can’t help dead, but you can refuse to be one of the financially illiterate masses.

As a PAYG you are the softest target of the Govt. and ATO, and that is because they know the majority of the population will think small and are too lazy to get off their butts to do anything about it.
 
Wysiwyg said:
Making weekly rather than monthly repayments reduces the interest payable on a loan so how would repaying daily go if the lender allowed it?
Click to expand...

I will likely pay monthly as it will not change the actual reduction of the loan when I pay.
The idea of an offset account is that when money is in that account it is reducing the loan so therefore if i put it in monthly or weekly the actual interest paid is the same.

I guess the only benifit of weekly is its easier to see what money you have available too you however that is i guess what a budget is for.

This thread i think may be quite helpful I hope to hear more ideas
 

If you are interested in minimising your payments most efficiently, fortnightly is generally the go (but I don't know the details of your offset account).

Example:

You have principle and interest payments of $1200 per month charged to you. That totals:

$14400 per year paid monthly (12 x $1200 payments).

$15600 per year paid fortnightly (26 x $600 payments - 50% of above)

$15600 per year paid weekly (52 x $300 payments - 50% of above)

So in reality all you are doing is making a full $1200 extra payment per year by paying fortnightly.

And that is the trick to paying off your home loans quickly; get as much extra of the principle paid off early as you can by paying as much extra per fortnight as you can afford. That takes years and many thousands of dollars of interest off your loan.

Therefore anything less than fortnightly is fairly minimal in its return except that is does reduce some very minimal interest assuming it is calculated daily or weekly by the lender, and fortnightly works well with most PAYG earners.

There are many calculators on the web - here is one - http://bizztools.com.au/suite.html
 
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