Hi Everyone,
I am hoping someone can help me here.
I am currently trying to savin (in sydney) to purchase my first property.
I am currently working a full time office job and have an opertunity to take a second job after hours. If I was not going to be taxed half my pay I would be doubling my current salary – hence getting my self that much closer.
My question is ~Does any one know any way or the best way of avoiding paying 50% tax on my second job. I have heard ppl talk of trust accounts and partnerships. My partner is currently studying and not earning an income. Is it possible for us to set up a partnership or trust and have all my earnings (added to this I earn commissions @ full time employment I am taxed a higher rate at as well) pay all my earnings into and pay the one tax amount? they are my thoughts and any advice would be GREATLY appreciated
Mandi
Trusts really don’t work with wages as the ATO classes this as personal exertion income and even if you use a trust, they will deem the individual to have earned the money themselves and tax them as individuals.
I don’t think their is much you can really do in this situation.
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 Mandi
When you get a second job they hit you with a higher tax for second job. But at the end of the day you only pay tax for the amount you earn.
If you earn more and it pushes you up to the next tax bracket then you pay tax in that bracket. If you don’t work a full year in your second job then you will get money back in your tax return.
Some people say it’s not worth it but if you make extra money regardless of the tax to get you on the way with investing your already miles ahead of someone who doesn’t want to work. and will probably never have investments but will always complain.
Cheers
NailwogYeah, and besides that, the government needs the money to bribe you to vote for them.[fear]
If your partner is a partner for more than 12 months its deemed to be a defacto(god i hate that term)relationship. This could mean that your tax could be viewed the same as a married couple. Check it out. Couples get tax breaks.
Use every cent you earn, declare the lot to the tax department and get property investing as soon and as much as you can. We took 6 months of not going out and baked beans on toast to get our first deposit, were still short and said halelulia credit card for the last $500.00. It took us 13 years to pay off our home in Sydney which we are now selling to fund our new house in Coffs.
Dont listen to others who say you cant, listen to your heart which says you can. It is hard to start but it is sooooooo worth it.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
one thing u can look at is salaray packaging for your loans, phones, cars and any other expenditures that you could possibly fit under that scheme. It will help reduce tax as the amount u package is usually before tax dollars, hence u only pay tax on the balance.
Say salary 50,000
Car Loan 1000
House loan 2000So you package it 50000-3000
= 47000 so u pay tax on that 47000 instead of the 50000 u earned.
Save a bit there.
There’s a limit to how much u can package, for that please talk to ur company packaging consultant/admin people. i’m sure they can point u out in the right direction.
There’s no Such thing as No Can’t Do!!!!!
i agree with mortgage advisor .if you can buy something and rent it out apply for yuor weekly tax deductions to be adjusted you may even find you have more money in your pocket otherwise you juat keep making the ato happy by paying truck loads of TAX!!!!!!!
JUST MY 2 CENTS WORTH
GOOD LUCK
never never never sell
Of course, if you had a job that can be done as a contractor, (say IT for example) you can form a company and be paid as a company and taxed at 30%. (Of course losing your holidays, sick pay and other fringe benefit, your invoicing must reflect such loss in the form of higher hourly rate).
What is your second job? Can you invoice your boss instead of receiving wages? You would be surprised as to how much employers welcome such arrangement; it saves them heaps of money too.Your plan to buy your own home is good, but remember that it is a liability and not an asset as you may think it is. (Read R. Kiyosaki’s ‘Rich Dad Poor Dad’ book). So it will take money from your pocket at perpetuity.
An investment property on the other hand, and providing the income services the mortgage and leaves some left over for you, is an asset since it puts money back in your pocket.To give a balanced view, it is also true that 95% of people obtain capital gain, probably the only chance to ever see any capital gain, through the sacrifice that implies purchasing your own home. This some times leads to chances to re-invest in other assets using this capital gain the Banks like to call equity. If such capital is not reinvested in income producing assets, (with the consequent risk of putting your own home on the line), any CG on your own home is academic since to access it you need to sell your house, and this has a cost, I think the economist call it cost of opportunity.
Your tax “problem” is not unique, and it is because our tax system works on the “Robin Hood” principle of taking from the one that has, and giving it to the one that has not, with total disregard as to the reasons why we have or have not prospered.
Since politics is the art of purchasing votes for the next election, and the have not’s are more numerous and all votes count the same… give away what’s not yours and you are assured a victory at the polls. (End of cynicism)
To escape the rat race, you need to switch from a lineal income, where you trade dollars for hours to a residual income where you are paid many times over through leveraging on your capital, contacts, knowledge, inventions, art, and whatever else you can offer.
This Forum is dedicated to the art of purchasing income producing assets, namely real estate, a very good way to build residual income. Yet this is surely not the only way to build residual income.
May God prosper you always.[biggrin]
MarcMandi,
As others have already said, you are not taxed at 47 cents in the dollar except when your income reaches the highest level in that bracket. So you would only be taxed at that rate for each dollar you earn oer 62k. also check the new levels since the Budget was brought down.
It’s a myth that each second job is taxed at 50 cents in the dollar. If you are earning 35k in your first job, then you have another 27k to earn in your second job until you kick into the highest bracket. Just tell the accountant at your new job what you are earning in your first job, and they’ll adjust your taxation level accordingly.
kay henry
if you had a job that can be done as a contractor, (say IT for example)
It depends, you have to have oer 3 clients and also their is a another test (about personal labour), but with good advice (accountant) it is very doable.
As for a second job, as you can see Employes get very little tax beneifts compared to business owners / investors. So I would try to funnel your time and energy into forming a company so you can get your tax level down. Of course tbe end goal witha business is to make a profit, and the tax benefits help with that! Check out Robert Kiyosakibok ‘Cashflow Quadrant’ for more info.
Rgds.
Lucifer_auYou cannot talk about tax and skip the politics that made the Tax system. Our politicians wave with the left but drive with the right, and so we have the inconsistency we all know about.[withstupid]
As for religion, I don’t see any “religion” in my post.
Comments made are of a general nature and should not be construed as advice to any particular individual.So if you prefer the Pacha Mama … be my guest.
May God prosper you always.[biggrin]
MarcWell…if you want to discuss the difference between religion and faith we can have a go, but I do not think the rest of the forum will be interested, as demonstrated already in another discussion where my signature was the focus of attention.
Remember that when you say good by, you are saying “God be with you”. When you say Shalom, you are saying much more than peace, it literally means, “I wish for you a state of well-being that affects wherever you walk and whatever you touch.”
My signature is a wish of prosperity, something that is consistent with the quest of people that post on this Bulletin Board. I hope you take it as for what it is, a good wish to you. Nothing else. I am not disputing your believes nor your disbeliefs since I am not religious.
May God prosper you always.[biggrin]
MarcBack to the question,
I work 3 jobs, all taxed, etc etc etc… my advice is if u want something hard enuf, then u will do all u can to get it, (thus my 3 jobs)… hmmm change ur tax forms so that ut highest paid job is ur “first job” (Q 11 if memory serves lol)
However, i worked with a chap for a while who claims he had solved the problem. For a few years he was claiming his second job as a first job, and was getting taxed the usual “first job” ammount for both.
I doubt this is legal however, a call to the tax office will probably confirm this…
Cheers, good luck!
Jason
Amanda,
I wouldn’t worry too much about the tax on the second job. You could see it as I used to see it, forced savings. The second job soes get taxed as if you were on the higher bracket, but it is worth it at tax time as you get a lot of the tax back. I got a massive $3000 back on year from overpaying tax!It really boosted my savings and I then felt it wasn’t all that bad.
Maybe also you need to have a look at your current spending habits to see if you can cut down at all. Cremin and I stuck to a fairly strict two week menu, which did get a little boring after awhile, but we ended up saving an extra $50 a week just from food.(I wish I could say we are doing the same now…)
After going through our finances with a fine tooth comb, we were able to save heaps of otherwise wasted money. (Sometimes up to $150 a week!!) The end result was we saved $24000 to go on a round the world holiday which is etched firmly into our memories because of the hard work we put towards saving for it. We enjoyed it that little bit more…
[offtopic]I think I have veered way off topic but you’ll work it all out eventually. Good luck and keep us all posted with your progress.
Steph.Success is 1% inspiration and 99% perspiration.
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