RESOURCES
When you see this box throughout the book, it will provide you with a tool or a calculator available on my website www.mrtaxman.com.au to help explain or work out a strategy.
When you see this box throughout the book, it will provide you with an answer to a frequently asked question that I have received from readers of previous editions of this book.
When you see this box throughout the book, it will outline a tax change which has been proposed by the government but has not been put through as legislation as at date of publication. Before making any decisions, ensure that you check the status of these proposed changes as there may be variations to the original proposal as it passes through both houses of parliament.
When you see this box throughout the book, it will outline a relief measure that the government introduced to combat the economic fallout from the coronavirus pandemic which has swept the globe since 2020. All of these relief measures have been legislated as at date of publication. However before you make any decisions in relation to them, ensure that you check the dates and current status as they were only designed as temporary measures and may have lapsed by the time you take action.
INTRODUCTION
Like for many people, writing a book — just one — was on my bucket list for years. So come 2010 I was really fortunate to get the opportunity to write the first ever edition of 101 Ways to Save Money on Your Tax – Legally!
Back then I had three main objectives for the book. None of them were to make money (although my mates think that was the only reason!). First, I wanted to help maximise everyone's refunds by making you more aware of the different ways that are available to help you save money. I wanted to reduce the confusion around all the different types of government benefits and tax concessions that were available to you so that you started claiming more of what you were legally entitled to.
Second, through the setting of boundaries, I wanted to reduce the amount of fraudulent claims made so that we all pay a fairer share of tax. I am not sure what small part I played with achieving this objective but looking back at table 1.1 from the first edition it's hard to believe that the tax-free threshold was only $6000 whilst family companies paid an extra 5 per cent tax than what they will in 2022-23! Third, although this was never published, I didn't want my mates hassling me for tax tips at 2.45am when we were out having a few beers. Needless to say as time rolls on, with age and families, this objective has also been achieved!
Whilst these objectives haven't changed over the past decade — and the structure of the book is still pretty much the same — I never thought in my wildest dreams I would be writing tax tips about cryptocurrency, non-fungible tokens, the sharing economy, downsizer contributions and a crazy coronavirus that would cause a pandemic around the globe. Likewise, I never thought that tax incentives such as the education tax refund and medical expense rebates would be scrapped along with travel to visit your investment property. I guess tax changes is one of the few constants in life, along with death and taxes!
This book is split into various parts in line with some key areas surrounding your finances:
you and your family
your employment
your education
your investment property
your shares
your superannuation
your business.
In each part I will share with you a number of tips and strategies that you can implement to save money on your taxes — legally!
You should leave no stone unturned in your quest to legally minimise your tax. While everyone should pay their fair share of tax, the late Kerry Packer summed it up best when he famously said ‘don't tip them!’
Now I don't expect that every single tip will be applicable to every single person out there but I am confident that there will be at least one tip that will save you more than the cost of this book. Some tips will maximise your refund, others will minimise your tax, while others will simply save you money. Some may save you millions over a lifetime, others just a few dollars. But times are tough and every dollar counts.
Over the years I have dedicated this book to many amazing people who have had a huge impact on my life. My mum and dad (who have both passed away); my three kids (Hamish and Zoe on earth and Sophie in heaven); my wife Kylie; my university colleagues; the Irish cricket team; my neighbours; the Allies on Kokoda; the frontline emergency services and healthcare workers and even the Commissioner of Taxation!
But I also dedicated two editions to two amazing families who helped us have Hamish and Zoe via surrogacy (the Donavans and the Merediths). Before we started the surrogacy process, I remember one of our tummy mummies telling us that she had a gift to bear children, but ‘a gift is not a gift unless it is given’.
I feel the same way about this book. Ever since I started working as an accountant at the age of 18, I have had a gift (some would say a curse) for understanding tax. But as a gift should be given, I have decided to share some great tax tips with you for a small tax deductible fee (that is, the price of this very cheap book!).
Whatever you get out of this book, I hope it is positive and not too taxing! And this is my gift to you.
PART I YOU AND YOUR FAMILY
From marriage and children right through to divorce, retirement and ultimately death, all families encounter many life-changing events. And in nearly all of these events, there are tax consequences along the way.
The Australian tax system offers a range of tax benefits including credits, refunds, offsets and bonuses to support families. Some people feel ambivalent about putting their hand out for government entitlements. But don't be shy in claiming your fair share. After all, the government doesn't get shy when it comes to taxing you!
Tax evasion and tax avoidance are illegal ways of reducing your tax payable. Tax planning and tax minimisation are legal ways of reducing your tax payable.
Part I looks at the tax concessions available to families, the special considerations you need to look out for, as well as some simple strategies to save tax within your family.
You need a tax file number (TFN) to be eligible for any of these tax concessions, as do your spouse and your children if they have income, superannuation or investments.
1 MARRIAGE
Accountants are frequently asked two questions by couples who are just about to get married: ‘Are there any tax implications once we tie the knot?’ and ‘Do we need to start doing joint tax returns?’
Your