Raftery - 101 Ways to Save Money on Your Tax - Legally! 2013 - 2014

This third edition published in 2013 by Wrightbooks an imprint of John Wiley & Sons Australia, Ltd 42 McDougall St, Milton Qld 4064

Ofce also in Melbourne

First edition published by Wrightbooks in 2011. New edition published annually.

Typeset in 10.5/14 pt ITC Giovanni Std

Adrian Raftery 2013

The moral rights of the author have been asserted

National Library of Australia Cataloguing-in-Publication data:

Author:Raftery, Adrian, 1971

Title:101 ways to save money on your tax legally ! 20132014 / Adrian Raftery

ISBN:9781118621769 (pbk.) 9781118621882 (ebook)

Notes:Includes index

Subjects:Tax deductions Australia

Taxation Australia

Finance, Personal

Dewey number:336.2060994

All rights reserved. Except as permitted under the A ustralian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above.

Cover design by Jeff Faust

Cover and internal image: cogal/iStockphoto.com

Tables 1.1, 1.2, 1.3, 1.4, 1.5, 2.1, 2.2, 2.3, 2.4, 3.1, 3.2, 3.3, 4.2, 5.1, 6.1, 6.2, 8.1, 8.2, 8.3 Australian Taxation Office for the Commonwealth of Australia.

Printed in Australia by Ligare Book Printer

10 9 8 7 6 5 4 3 2 1

Disclaimer

The material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances and it should not be relied on as the basis for any decision to take action or not take action on any matter which it covers. Readers should obtain professional advice where appropriate, before making any such decision. To the maximum extent permitted by law, the author and publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based on the information in this publication.

Dedicated to my two children Hamish on earth and Sophie in heaven. Thank you for being the sunshine and angel in my life.

About the author

Adrian Raftery (MBA, B Bus, FCA, CFP, F Fin, CTA, MAICD), aka Mr Taxman, is fast becoming one of Australias leading commentators on all matters relating to tax and finance. With regular columns in various investment magazines, a PhD scholarship and frequent appearances on TV and in the media, Adrian is Australias newest financial expert.

Part of Adrians tax appeal as a financial media commentator is due to his personable and approachable style. Just as importantly, Adrians 20 years experience as an award-winning accountant working with small and medium businesses, and as a personal tax expert, means he has the relevant knowledge and experience to give qualified advice.

Adrian is considered so good at what he does that he is one of the youngest Australian accountants to have advanced to Fellowship with the Institute of Chartered Accountants at the age of 33 and had an award-winning Sydney accountancy firm at just 25! These factors and Adrians ability to translate complicated tax and finance jargon into understandable and workable solutions are probably why Mr Taxman is frequently called upon for his viewpoints by the Australian media.

How to use this book

This book is designed to be of benefit to 99.9 per cent of taxpayers. If you have an investment property, own a share portfolio, have money in superannuation, have a family, work as an employee or run your own business, there will be something in here for you.

While it is extremely unlikely that all 101 tips will be applicable to you, your family or your business, just feel comfortable knowing that one tip alone will be more than enough to pay for the investment you make in buying this book. This book has been written to take into account all phases of life, so if you find that only a few tips apply to you right now, dont worry because more tips will become relevant as you grow older. Make sure that you consult your own adviser to assess your own particular needs before implementing any of these tips.

If there is one constant with tax, it is change. That is why I update this book every year to take into account the latest federal budget changes in May each year. If you intend using this book as a reference guide over a number of years, you should always check the latest tax legislation for the current figures and thresholds.

Remember that tax planning should be a year-round exercise, not merely one thats done in the last few weeks before 30 June. A lot of these strategies are just as useful on 1 July as they are on 30 June.

Tip

When you see this box throughout the book, it will provide you with a handy suggestion in relation to the particular money-saving strategy.

Tax fact

When you see this box throughout the book, it will provide you with an interesting fact.

Pitfall

When you see this box throughout the book, it will outline a potential pitfall in relation to this money-saving strategy that you need to look out for.

Bonus 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.

Introduction

In July last year, my wife and I were extremely fortunate to celebrate the birth of our son Hamish via a friend who acted as a surrogate mum. Before we started the surrogacy process, I remember her 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 it is 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!).

This book has two objectives. First, I would like to help maximise everyones refunds by making you more aware of the different ways that are available to help save money on your tax legally. Second, through the setting of boundaries, I wish to reduce the amount of fraudulent claims made so that we all pay a fairer share of tax.

My motivation for writing this book is the number of families out there who dont understand all the different types of government benefits and tax concessions that are available to them. I hope that this book will try to help reduce the confusion and that you will start claiming more of what you are legally entitled to.

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 properties

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, Kerry Packer summed it up best when he famously said dont tip them!