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Reduce your tax, tax savings, tax returns, tax reduction, pay less tax. |
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Case Studies
How can you benefit from proven tax planning advice?
Objective - Shaun is a project manager earning a salary of $125,000. He is looking for an investment that provides tax advantages as well as a medium term income stream.
The Great Southern (GS) tax planning strategy below helps Shaun to achieve these objectives, however, there are additional strategies that he may employ to bring the tax advantages forward. Ask us for details.
Income Tax Planning Strategy – Shaun purchases 5 woodlots in Great Southern Plantations 2007 project ($15,000 + GST), and registers for GST.
He finances this investment cost (excluding GST) with a 7-year principle and interest loan from Great Southern finance. Repayments on his loan will not be required until July 2008. Due to the 100% tax-deductible nature of the investment, Shaun receives a tax benefit of $6,225 in his 2007/2008 tax return.
He is also expected to receive returns from harvest proceeds approximately 8-12 years after planting.
|
No Tax Planning |
With GS Tax Planning |
Annual Salary |
$125,000 |
$125,000 |
Tax deduction from GS investment |
|
($15,000) |
Taxable Income |
$125,000 |
$110,000 |
Tax on income |
$38,974 |
$32,749 |
After tax position |
$86,026 |
$92,251 |
TAX SAVING |
$0 |
$6,225 |
Case Study 2 – If Shaun was earning $60,000 per year.
|
No Tax Planning |
With GS Tax Planning |
Annual Salary |
$60,000 |
$60,000 |
Tax deduction from GS investment |
|
($15,000) |
Taxable Income |
$60,000 |
$45,000 |
Tax on income |
$13,500 |
$8,775 |
After tax position |
$46,500 |
$51,225 |
TAX SAVING |
$0 |
$4,725 |
Case Study 3 – If Shaun was earning $75,000 per year.
|
No Tax Planning |
With GS Tax Planning |
Annual Salary |
$75,000 |
$75,000 |
Tax deduction from GS investment |
|
($15,000) |
Taxable Income |
$75,000 |
$60,000 |
Tax on income |
$18,225 |
$13,500 |
After tax position |
$56,775 |
$61,500 |
TAX SAVING |
$0 |
$4,725 |
Benefits.
- Reduction in tax payable
- Tax benefit can be used to Secure other investments
- PAYG variation can increase monthly cash flow
- Diversified investment created