ANZCA Bulletin June 2012 - final.pdf - Australian and New Zealand ...

Nobody likes paying tax. But how taxsavvy you are has an effect on howmuch money is in your pocket at theend of the year. Leon Getler reports.x%Australian tax laws allow you to deduct costsof doing business from your gross income.What you are left with is your net businessprofit. This is the amount that gets taxed.Knowing how to maximise your deductiblebusiness expenses lowers your taxableprofit. At the same time, there might be sidebenefits from your expenditure: a good car todrive, a combination business trip-vacationand superannuation.Anaesthetists have a range of deductionsto lower their taxable profit. Medicalpractitioners earn high incomes so a taxstrategy is critical. A tax deduction is anyexpense incurred in producing assessableincome. In other words, if the cost was paidin the practice of your profession you canclaim a tax deduction.Savvy professionals can reap tax rewards Crossing the South Island the hard wayIn New Zealand, anaesthetists in privatepractice will now enjoy a lower tax rate thantheir Australian counterparts. New Zealand’scompany tax rate dropped to 28 per cent lastyear, putting it below the Australian companytax rate. The deductions are the samefor Australia but they need to be careful.The Supreme Court last year found twoChristchurch surgeons used family truststo pay themselves “artificially low salaries”and deliberately avoid tax.The deductions are what attract the mostinterest. Anaesthetists running a practicecan claim medical supplies, medicines,equipment and material. They can alsoclaim professional indemnity insurance.Another source for deductions comes withprofessional subscriptions, accreditations,literature, education and memberships.$200.00 +Rug up and explore with a wintry European adventure$28.46 +$45.68 ++$$798.15 +$239.00 +$145.78 +$895.00 +$45.68 +$798.15 +$239.00 +$145.78 +$895.00 +$45.68 +$798.15 +$239.00 +$145.78 +$895.00 +$239.00Anaesthetists also can claim travel, not+including travel to and from work. Traveldeductions can cover conferences and studytrips,$145.78even if they include a holiday.+Tony Greco, a senior tax advisor withAustralia’s Institute of Public Accountantssays:$895.00“Some people are able to claims trips+abroad further research, as long as theydon’t do too much of the other stuff.”$45.68This means the trip would need to be+documented. There needs to be paperworkfor every activity around research. If, forexample,$798.1560 per cent of the trip was spent+on further research and the rest of thetime on vacation, there would be a 60 percent$239.00deduction. The airfare might be fully+deductible but accommodation and otherexpenses would be apportioned. “It takessome$145.78co-ordinating and apportioning but+that’s not to say you can’t go on a holiday,’’Greco says. “That’s not to say you can’t mixa$895.00bit of pleasure with business.”+(continued next page)$45.68 +$798.15 + 91Savvy professionalscan reap tax rewards