There is no magic single answer to reducing your taxes, life is not that simple, but there are a number of things you should be doing to ensure you’re not paying someone else’s as well as your own!
Plan well in advance. Think through the best structure which suits you and know well in advance what the consequences are, tax wise, of your business or investments. Know your Provisional Tax and ACC liabilities well in advance.
Don’t pay your taxes late. Yes, there are no credit checks and it’s easy to get but it’s a very expensive way to get finance, very expensive indeed!
Don’t just think Income Tax. Tax comes in many varieties including ACC, FBT, RWT, GST, PAYE, ESCT, Withholding Tax, and Schedular Tax. All deserve attention if you want to mininise your overall tax bill.
Seek professional help. Tax is extremely complicated and even professional tax accountants struggle to keep up with the law and regulations which are constantly changing. A good accountant will save you much more than they will cost you in fees.
Don’t listen to “G & T” (gin and tonic) advice. There’s always someone claiming to pay no tax whatsoever or that he gets regular GST or tax refunds. Their circumstances will be different to yours, they may have a bad accountant (and I mean bad, not good!) or they may just be hopeless optimists prepared to take huge risks.
Steer clear of tax evasion and sleep better at night. The tax system works by severely punishing those who are caught and making an example of them and being caught is most unpleasant.
Start your own business. There’s no better way to get flexibility into your affairs and claim deductions that an employed taxpayer can only dream about!
Paying tax is, like it or not, part of modern life and the pool of taxpayers is dwindling, seemingly replaced by an endless queue of those who think they deserve to be supported by taxpayers, so do all you can to pay less tax and save for your retirement – you’ll need to the way its going!
If you need help to seriously slash your taxes contact Nick on 0800 ASK NICK or email nick@abac.co.nz.
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Did you know that the amount you can earn in Australia before you pay tax is now $18,200 (about $23,100 NZD)? That’s NZD$444 per week or NZD$2,758 a month. Who said that tax rates in Australia are higher?
