Hi ,,i am considering setting myself up as a contract worker ,,whereby i get paid weekly but i pay my own tax,,my reasoning in doing this is i am also buying a new house (intrest only loan ) which i will rent out. I figure that my loss or neg geared set up should allow me to pay probably zero tax on my wages etc ..Could someone please advise me if this is correct
cheers MalMal
2 quick points:
1) You may find it harder than you think to obtain a loan if you are a recently commenced Contractor especially if LMI is involved.
2) You are able to make application to reduce the tax deducted from your weekly pay if you are employed and in receipt of a Payment Summary. Just lodge a 221d Tax variation and you rwill get the same result.
There maybe other reasons that you would think about becoming a Contractor which i have not raised here but dont jump in.
Richard Taylor | Australia's leading private lender
ok ,,will reconsider..thankyou
And there are various requirements the ATO imposes on 'contractors' = alienation of personal services income. You must pass various tests to determine whether you are a business or the ATO will still class you as PAYE. Claiming a loss on an IP would still be possible as a wage earner.
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
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