Debt Reduction Strategies?

Yes it all helps

 

i have found that the system works very well for people who earn far more than they spend.

For those who live close to their incomes, I have seen this system work against them.

 

I can't believe this?! Wow!

 

Not all accountants are tax agents so not surpirising they dont all know about tax.

 

i hear @fullylucky can do anything you want in excel, except make coffee! ;-)

 

Good point! I've only ever dealt with accountants myself, I hadn't thought about this fact.

 

He was a tax agent at ITP - I assumed he was an accountant.

 

If itp maybe he wasnt even a tax agent

 

Really?! Can any blow in be an ITPer?

 

Wouldn't be worth it! You would at best have an extra $400 in your offset at any one time.

So $400 x 4.5% pa = $18 a year in savings

There is no magic formula and I've seen lots of people get into trouble with the credit card option. Works for the frugal but they are already ahead anyway.

 

What can happen is that one person will hold the tax agent registration and then others are employed to do the work. I believe the one with the licwnce must be giving the advice and meeting with the clients but this doesnt always happen

 

"Really?! Can any blow in be an ITPer?"

Oh yes. The owner/manager of places like ITPs might hold a tax agent number but people who work for these franchises might not necessarily have the license or qualification. They are trained to answer general questions in areas such as ITR lodgment or small business operation (BAS's and the likes) but their training are very basic. As Australian taxation law is a massive & complex beast to cover it's wise to make sure that the person you're asking advice from is actually capable to give you the right answer.

(Disclaimer: I'm not a TA but I used to work for our biggest revenue gatherer for many years)

 

I find that people confuse accountants and tax agents. I wonder if the accountant @Jess Peletier was referring to was a public practice tax accountant either self employed or working for a tax agent. If not, then nothing to be surprised about there. They could be working in a different field.
I don't know if people are aware but just like lawyers, accountants work in many different fields like auditing, commercial, forensics, compliance, insolvency etc.
Although some of these may have basic tax knowledge, many would not have any public practice and SME experience.

Edit- just noticed that it was an ITP person. That is bad. Even if they are not a TA, they are employed by one (if they are giving tax advice) and the TA should be reviewing everything especially knowing that their employees are not experienced enough to know what a tax variation is.

 

Yes the general usage on the forum conflates the words accountnant and tax agents.

Not all tax agents are accountants either.

 

Sadly true in our experience. Too many times I've talked to clients who have recently changed accountants (or tax agents!) and are cursing their former one. In many cases they're thousands of dollars poorer because of a lack of good advice (or any advice) around depreciation. And, of course, we speak to many professionals across different areas of property investment and it's always frustrating to hear property professionals say, "We just leave it to the owner's accountant to handle that." That's making an assumption about the accountant's knowledge/competency that might not be true.

 

Hmm, interesting to know and I appreciate you adding your experience because I didn't know this. I always mention to my clients that they can have their variation done via their accountants, but knowing this I think I will document it rather than just mentioning it in future.

Do you have any documents or advice leaflets you offer on this? I refer clients to your company for their reports, I would be interested if you have anything you can send me regarding this that I can pass forward to clients.

 

General information in regards to making a variation on your income tax as an individual:

PAYG withholding variation application | Australian Taxation Office

And as a sole trader or investor you can also do the same for your installment amount:

How to vary PAYG instalments | Australian Taxation Office

Make sure you select the correct (reason) code and get as close as possible to being accurate for your estimation. Penalties may apply if you vary & underestimate your tax by more than 15%.

 

I'm with ITP. Time to make the move.

 

I've looked all over The Google for a calculator that reflects the savings from doing the 55 day interest free credit card thing. Closest I've found is the extra repayments one but as it's only a temporary "repayment" and not staying in the account to build up, the outcome would be different. Is there a calculator or simple formula to use to calculate it myself?

Want to go 5 year IO and temporarily place $12k in every 55 days but keep $3k every time in so first time would be $12k, second $15k, third $18k etc. if that makes sense!

 

Yep, very much contemplating cutting this strategy loose. It is just not working for my wife and I.
I am sure the amount of wasted spending that occurs because of the card far outweighs interest saved and points.
What's more though, those points usually get converted into another unnecessary holiday!