Tax Benefits

[Khutan]

I was looking at my payslip recently and I was not particularly happy with the amount of Tax I am paying, where I am sure there is a more effective way to work my package.

So if we assume that many of us are in the top 37% tax bracket, what ways are common for making ones income more effective.

I remember having worked in other countries, there are all sorts of "Salary Sacrafice" schemes like cars, and "Educational Travel" Fuel, home office, etc etc.

The other things that come to mind are "Salary Splitting" so for example my wife yould be paid an income from the company to the point where she hits the 37%, etc etc.

Anyway, I am interested in everyone's ideas.

[Chang_paarp]

Stop being an employee, not sure it is an option in your case.

Form a company and become a consultant, corporate tax rates are less than personal (I think). Spread the company wealth around by giving the MD a reasonable package, pay the company secretary well, are there any "office assistants" in the Khutan household? Has the maid just qualified as the office cleaner?

The company would need to supply the car for MD and company secretary, the board meetings would need to be held in Langkawi, or Hong Kong or any place with a decent 5* hotel.

You probably will not get away with a benefit my grandparents did. As sheep farmers, they bought whiskey by the carton from the local farm co-op, the invoice always said sheep drench.

[samran]

Mate,

if you have to be an employee, take a look at things like the long term funds. Basically, you can invest up to 15% of your pre-tax salary in these things in the year you invest. Technically, they go for 5 calendar years, but in reality that means 3 years (eg Dec 31 - Jan 1 being considered 1 year). The lowering of your taxable income may make the fund worthwhile. Or it may not...depending on your view of the SET.

Don't forget to claim all the other usual things, the allowances for having a wife, kids etc. If you own a house I beleive a portion of your interest payments are tax deductable as well.

Cheers

Samran

[Tywais]

Don't forget to claim all the other usual things, the allowances for having a wife, kids etc. If you own a house I beleive a portion of your interest payments are tax deductable as well.

I suspect you are already familiar with this page but just in case: Revenue Department

[Khutan]

Don't forget to claim all the other usual things, the allowances for having a wife, kids etc. If you own a house I beleive a portion of your interest payments are tax deductable as well.

I suspect you are already familiar with this page but just in case: Revenue Department

Thanks tywais;

I have read that website with some intrest a number of times.

Rather I was thinking about getting my employer to lease a car and some other stuff etc from my pre-tax.

I know in some countries that is ok, and other countries it is not allowed.

[lanny]

You don't say what country you are from. If you are from the US, the advice to stop being an employee is bad advice.

As an employee of a non-US employer, you are still subject to US income tax but, normally, not the social security taxes. Of course, you may have the benefit of the foreign earned income exclusion. so the income tax consequences of changing may be nil.

However, if you are not an employee, IRS considers you to be self-employed. The foreign earned income exclusion is an INCOME tax election and does not apply to the self-employment tax. So, if you receive payment as a consultant, even though you may not have to pay income tax, you will be subject to the self-employment tax -- 15.3% right off the top!

So, it is important to consider the impact of any arrangement on your US income tax.

As far as I know, the US is the only country that taxes its expats , though.

[Chang_paarp]

Kutan is an Aussie working in BKK for a large company.

As far as I know, for tax purposes he lives by the Thai tax laws. The concept he is talking about, "salary sacrifice" is permissible and used widely in Australia.

[Tywais]

Rather I was thinking about getting my employer to lease a car and some other stuff etc from my pre-tax.

It's possible your company (depending on how large) has it's own accountant or lawyer and might discuss it with them.

[Khutan]

Kutan is an Aussie working in BKK for a large company.

As far as I know, for tax purposes he lives by the Thai tax laws. The concept he is talking about, "salary sacrifice" is permissible and used widely in Australia.

Took Dong !!!! You are correct.

Exacty, I was thinking of the stuff like Cars, etc etc taken in Pre Tax rather than Post Tax, and getting the 37% discount.

I had a quik PM Exchange with Sunbelt and they do that stuff. So the fee they will charge will probably be saved many times over in a few months. So when I have some spare time, I will go and pay Greg a visit and maybe buy him lunch - if he has the time for a free lunch.