hello
my friend’s friend is a taxi driver who came to Australia 13 years ago. he has been driving his taxi for a few years. he lives in a big house whose current market value is at least 1.2 Million. and most importantly, he has already paid off his loans.i asked hime 2 questions:
1) how could you afford buying that house? (5 years ago when he bought it, it was worth less than 500k)
2) how could you pay off the loan in such a short period of time?and his answers were:
1) because i’m a taxi driver and earn cash money. i pay little tax and save a lot
2) because i repay more than bank requiresok now here are my questions for you:
1) this guy said he paid little tax and saved a lot of cash. i think he had cheated the tax man for a long time. so didn’t the tax department check where did he get his deposit from? i mean, if he had been paying only one thousand or two thousand of tax a year, it should have been very easy to calculate how much income he got and how much he could save, on theory. so when he put down 20% deposit(500k * 20% = 100k), why didn’t the tax department have a check on him and ask him where did he get the money from?2) if you overpay your loan, will the tax department check on you and ask you questions like “what’s your income sources” “how can you afford to overpay?”?
thank you
Kenzhang, it’s not too often that the ATO will check things like deposits and where they came from.
As Australia is a self assessment country (ie, you basically ‘say what you like’ in your tax return, and hope that you don’t get audited and have to prove it), your friend’s friend obviously got lucky and so far has never been subjected to an audit. If he is selected for an audit, they can go back at least 5 years, and sometimes more, so he could (theoretically) still get in a whole s***load of trouble with the tax man.
Cheers
MelHi Kenzhang,
Yes, an audit may show up a few suprises for this gentlemen [
]
Then again, maybe you’re not giving this person enough credit? He may have brought money with him when he migrated to oz, or have family support. Some migrant families have excellent financial strategies where all members contribute money until all family members own a house.
He might work long hours and save well to pay off his debts.
Then again, cash does help []
Cheers,
Sue [8D]“Be careful not to step on the flowers when you’re reaching for the stars”
some taxi driver i know work with another person, two ppl, two 12 hour shifts, over 1 million kilometres per year. if you’re willing to work your butt off, you will get paid. how many ppl do you know that work 12 hour days, 7 days a week, almost 365 days of the year…????
then again, who’d want to!? bah!
The ATO has various methods of checking up on people, but one of the best is the old human intelligence. ie people dobbing tax cheats in. They have data matching software, but a lot of people fall thru the cracks.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
They had on the news yesterday that there have been thousands of people dobbing others in – mostly ex spouses/business partners and I think neighbours.[8]
Cheers
MelNot long ago the Taxation, Immigration and Licensing Departments held two raids on taxi drivers at the airport with very good results[
!]If I knew then what I know now……….you know how it goes
disgruntled ex-partners are a great source of info!
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Guys,
This is sorta on the subject but has lots of reference to it.
Lets say your earning and have a taxable income, but also you have a second job, which is cash on hand, i know for a fact with some lenders they will consider both earnings against your borrowing and repaying power you have.
They will simply ask you, to get a letter from your work/boss stipulating how much you get payed everyweek, either if you are FT, PT or casual and how long you have worked there.
Dont be surprised if they accept this, cause i have seen this happen and i know of people who do have second jobs that are cash on hand.
Cheers,
sismmmm…. tax free income her i come [
]Cheers Matt
“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
Hi Matt,
Dont take it too serious on tax free income, if you do get caught you will get into a lot of trouble. This is something some banks will see as extra cash money you have available, but not all and most lenders will accept this.
The only way i know people have got round this is, that their primary job is taxed and is a real proof of income, the secondary job (cash in hand) is something the bank might consider.
Cheers,
sisdon’t worry sis, i have a trick or two up my sleeve [
]Cheers Matt
“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
Matt
I find your ethics interesting.
You brand wrapping, which is fully legal (in most states) as unethical, and yet you consider earning cash income and not declaring it, which is illegal, okay? [?]Keep smiling
FelicityKenzhang,
One can pay off there home loan if they won at casino…tax free income…
may be your friend’s friend done that or something similar ie. lotto, cash from oversea, relative,……
Warm Regards
ChanDollars
[Keep going, you’re nearly reach the end of financial freedom]Originally posted by FW:Matt
I find your ethics interesting.
You brand wrapping, which is fully legal (in most states) as unethical, and yet you consider earning cash income and not declaring it, which is illegal, okay? [?]Keep smiling
FelicityI did not “brand” wrapping, i simply don’t see it as a good way of going about investing in property as i see it as being unsecure. Purely a personal opinion.
Im sorry i wasn’t aware that i was the only one on here who was trying to save every dollar they earn being taxed. The majority of the money that i am going to be earning is going in to property investing anyway.
Cheers Matt
“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
If people work hard and are rewarded there is nothing wrong with that. It is labeded the domestic ecconomy. Pocket money for kids, tips and other insignificant monies. Some are generous in their interpretation of tax policy.
Perhaps you would prefer the word “Labelling” rather than branding.
To quote Kay Henry:
“I think they are unethical.”
And your reply:
“I couldn’t agree more with Kay”There is also a big difference between reducing your taxes by all legal means available to you, and tax evasion, which is illegal.
I think that everybody has the right to structure their affairs in any way they can to utilise existing tax laws to their benefit.
But earning cash income and not declaring it is tax evasion, and that’s illegal.Keep smiling
FelicityOriginally posted by Kay:
Sorry- there’s nothing factual about what I’ve written- but I am not going to undertake practices that I find unethical, to be able to have an opinion about them.Mabye u didn’t read or ust skipped over the word OPINION… It was clearly a personal opinion which everbody is entilted to on these forums.
I see no reason to quote Kay’s whole post, as throught her whole post, she practically said, that what she said was her personal opinion and thats just not how she invests. Kay is also allowed to have say on here about her personal opinion.
I can not see why you brought this up. Everyone else was obviously fine with what I said as they could see that it was clearly a personal opinion. Even if they didn’t agree with what my opinion was, they could see any reason to bring it up. I don’t want cook up an arguement here so lets just leave it as it is, and let everyone have their fair say on these forums
Cheers Matt
“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
Matt, mate, I’m sorry but in the instance of not declaring your income, I think you’re going to be doing the wrong thing.
Kay’s opinion is that wraps are unethical – nobody’s disputing that she can have her opinion. You ‘fully agreed’ with Kay. Were you agreeing that she could have an opinion, or were you also stating that your opinion is the same – ie wraps are unethical?
As Felicity said, from the above – you are of the opinion that wraps are unethical (albeit legal in most states), however you are willing to participate in the ILlegal acitivity of not declaring your income.
Yes, it’s probably a matter of semantics, but that’s the way it is.
Mate, you’re still a young fella, don’t go down the non declaring road – it will be harder to prove income when you want a loan, and it just doesn’t look good. Besides, there are so many legal ways to ‘print’ money.
Cheers
MelMabye i should take this oppurtunity to clear a few things, i did not say that what i was going to do was not illegal, and i did not say that wraps were illegal. I personally find that they are not the way that i would like to go about investing in property I didn’t realise that we weren’t allowed to have opinions on here… [V]
Cheers Matt
“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
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