Suggestions on reducing tax

dhashi · 14 February 2021

Hi All.
New member and relatively new to the stock market. I have profit of about $50,000 this financial year. I haven't held any stocks more than a year. I'm flexible with classifying myself as either investor or trader. I don't have any other income sources at the moment.
Any advice on how to best minimise my tax payment.
Thanks

Warr87 · 14 February 2021

no one is going to give you advice on reducing tax. we aren't your accountant. have no idea of your circumstances. and can't legally provide you with any advice.

rnr · 14 February 2021

dhashi said:
Hi All.
New member and relatively new to the stock market. I have profit of about $50,000 this financial year. I haven't held any stocks more than a year. I'm flexible with classifying myself as either investor or trader. I don't have any other income sources at the moment.
Any advice on how to best minimise my tax payment.
Thanks

As we do not give advice on ASF this is merely a suggestion.....the ATO is a good place to perhaps start and then follow-up with a visit to a tax accountant.

Joe Blow · 14 February 2021

Warr87 said:
can't legally provide you with any advice.

Just to clarify here, but taxation advice is different from investment advice. However, I think it is best to only take taxation advice from a qualified accountant who is aware of your personal circumstances.

That being said, if anyone has personal experience in this area, there is nothing wrong with sharing your own knowledge or experience.

dhashi · 14 February 2021

Apologies my mistake, I mean "suggestions" rather than advice.

So_Cynical · 16 February 2021

dhashi said:
Hi All.
New member and relatively new to the stock market. I have profit of about $50,000 this financial year. I haven't held any stocks more than a year.
Any advice on how to best minimise my tax payment.
Thanks

Try and hang on for that magical 1 year, its a massive help to be only paying tax on half your profit.

Value Collector · 16 February 2021

dhashi said:
Hi All.
New member and relatively new to the stock market. I have profit of about $50,000 this financial year. I haven't held any stocks more than a year. I'm flexible with classifying myself as either investor or trader. I don't have any other income sources at the moment.
Any advice on how to best minimise my tax payment.
Thanks

You should probably only owe about $6600 tax on $50,000 so I would sweat it, just pay the tax and spend your time thinking about earning the next $50,000.

Over the years I have learned the best way to deal with tax is to set aside some money to pay the tax bill throughout the year as the profits come in, that way the money is always there to pay the tax bill, and because I never really consider those funds I set aside as being mine, it doesn’t hurt to write the check.

Smurf1976 · 16 February 2021

dhashi said:
Apologies my mistake, I mean "suggestions" rather than advice.

In case you're not aware - there's a specific legal issue surrounding "advice" which precludes anyone not licensed from giving it. That's a government rule, the law, and not something specific to this forum.

We can certainly offer opinions and suggestions however and some which come to mind:

Remember the 12 month CGT rule when selling. This may or may not influence your timing decisions.

Choosing to sell before or after 30 June will influence which financial year you pay CGT in and, depending on your overall financial circumstances, that may mean you're at a different marginal rate. If you're going to sell anyway then moving that forward or delaying it (as appropriate) may be advantageous.

If you have any stocks in the red then selling those will reduce your net capital gain and thus tax payable.

I'm no expert on the subject but contributing money to superannuation may also offer some benefits in this regard.

qldfrog · 16 February 2021

Smurf1976 said:
In case you're not aware - there's a specific legal issue surrounding "advice" which precludes anyone not licensed from giving it. That's a government rule, the law, and not something specific to this forum.

We can certainly offer opinions and suggestions however and some which come to mind:

Remember the 12 month CGT rule when selling. This may or may not influence your timing decisions.

Choosing to sell before or after 30 June will influence which financial year you pay CGT in and, depending on your overall financial circumstances, that may mean you're at a different marginal rate. If you're going to sell anyway then moving that forward or delaying it (as appropriate) may be advantageous.

If you have any stocks in the red then selling those will reduce your net capital gain and thus tax payable.

I'm no expert on the subject but contributing money to superannuation may also offer some benefits in this regard.

And if you get your money via trading, then not much you can do in term of timing.you will pay tax but you could ensure you are gst registered to get back gst on your brokerage and claim back all costs associated yo your income: software ,hardware and subscription costs

dhashi · 16 February 2021

Thanks all for the feedback. I will speak to an accountant.

rova · 26 July 2021

dhashi said:
Hi All.
New member and relatively new to the stock market. I have profit of about $50,000 this financial year. I haven't held any stocks more than a year. I'm flexible with classifying myself as either investor or trader. I don't have any other income sources at the moment.
Any advice on how to best minimise my tax payment.
Thanks

Some people run two portfolios, one are the shares to keep long term for income from dividends, however if ones wife has no income and unemployed then a trading account in their name, so the first $18,201 profit is tax free, doing it this way is legal.

divs4ever · 26 July 2021

rova said:
Some people run two portfolios, one are the shares to keep long term for income from dividends, however if ones wife has no income and unemployed then a trading account in their name, so the first $18,201 profit is tax free, doing it this way is legal.

.. just make sure it is a harmonious marriage , a 'rocky marriage ' can attract extra complications

dyna · 26 July 2021

Nobody needs to worry about income tax, anymore. The Labor party, bless 'em, have agreed to let the stage 3 tax cuts through. From July 2024, the 30 % rate will apply from $45,000 to $200,000 p.a. Negative gearing, in its current form, will be left alone, too. Sure to be a sigh of relief there, from our Anthony . The honorable member for Grayndler is entitled to a tax break, like anyone else, right?
Treasury will be worried though,..... about lost revenue. Then there is the debt, that's to linger for decades to come. How are the powers-that-be gonna raise other taxes to help out? Left or Right, some political party will have to commit to real tax reform, sooner or later. Debt can't all be foisted onto the next generation and the one after that.
One thing you can be sure of. This will be the last tax break we'll see, for a very, very, long time.

Suggestions on reducing tax

dhashi

Warr87

rnr

Joe Blow

Administrator

dhashi

So_Cynical

The Contrarian Averager

Value Collector

Have courage, and be kind.

Smurf1976

qldfrog

dhashi

rova

divs4ever

dyna

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Suggestions on reducing tax

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Have courage, and be kind.

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