Hi Guys, I currently earn about $80K PA, my wife earns about $25K PA. Im 50 and my wife is 48. We have a standard fixed home loan of $470K. I have $600K invested. Car loan of $70K and a credit card with $25K max, $7K owing. Ive just done my 2016 tax return and have to pay the ATO back $6K :( They now also want me to advance quarterly payments of $2K starting in July. WTF!!! What can I do to reduce my income tax??? I am definitely not a rich man, but Im sure the ATO think I am!!! HELP??

Hi there, I would be looking first at why you had the 6k in tax owing. Were you under taxed in your salary? Also what is your 600k investment? If it is positive returns and it is flexible, you may wish to consider moving this to your wife's name.

There are plenty of tax planning options available, but hard to specify which ones would be suitable without more detailed information.

Happy to have a chat with you if you need.

Kind regards,
Jenny Thai
JTR & Associates

Good Morning Kahuna H.
Jenny is absolutely correct!
You need a tax review first and foremost before making any decisions about moving forward. In my opinion, having a collaborative approach with a team of professionals is the best way to go. This means a good tax accountant, mortgage broker, property investment coach, financial planner and a solicitor.
Don't let this list scare you off and it won't be as expensive as you might think!
There is great wisdom in surrounding yourself with a team of professionals that can keep you moving forward in a positive way and avoiding situations like the one you currently find yourself in.
So start with an accountant and then find your next professional that can help but make sure these relationships are for the long term not just a quick fix.
My specialties are with Finance & Property
Happy for a chat anytime
Best Wishes
George
0411216849
George@how-strategygroup.com.au

Hi Kahuna,
It is simply a case of you not paying tax on your investment earnings during the year and being taxed on your total income when doing your tax return. The instalments are to protect you from a lump sum payment at the end of next tax year.
From a brokers perspective I would use the investment money to pay out the credit card and possibly also the car loan depending on the penalty you might incur. It is crazy to pay 10%-20% on those debts when your investment is earning 2.5% and is taxable.
With $600,000 you could buy 2 investment properties that are both cash flow positive and provide some tax relief.
A financial planner could advise you on some options to invest in a tax effective way including a self managed super fund
If you want to hang on to the $600,000 you need a loan product that has 100% offset. If your bank doesn't have 100% offset on fixed loans you should compare the cost of exiting to the interest and tax you would save by switching to a better product.
There are lots of considerations for you Kahuna, I am happy to have a discussion with you to explain further and answer other questions you may have
Best of luck
Scott
Scott.howell@mobilelender.com.au
0435474498

Hi and great question! We feel your pain. Of your $600k invested - is any of this in property? If so are you managing to claim any depreciations on your investment?