Short Term Trading Weekend Lounge: 17-19 Nov

Originally posted by journeyman ↑

Nod,I think you're going a bit far suggesting he should let go of his accountant, as I don't think ru-serious has given enough information to be able to advise that. As you noted, it doesn't sound like he/she fully understands their own tax situation and I would suggest they spend some time getting their head around that properly first, along with having their accountant explain why it is setup the way it is and whether there is a better tax structure that they could implement. If they are pay tax at such high rates, then it would be well worth the cost of restructuring, even if it comes at the cost of several thousand.

On the face of it though, i would suggest that even just settng up a new company solely for the purpose of trading would immediately limit their tax on profits to 30% (vs 48%). There are ongoing costs associated with administering companies though and they would need to explore that with their accountant further. They will also potentially pay the extra tax if they paid themselves a dividend from the company (if they are already paying the maximum tax rate in their own name), but it does enable some flexibility in terms of being able to have a spouse be a member of the company (they may pay low tax personally) and they could time paying dividends to themselves in years that they aren't earning much.

For anyone approaching retirement age, one of the best financial decisions you ever make could be setting up your trading in a self managed super fund. This is complicated though and requires in depth advise from accountants and/or financial planners. Smsf's very specific to each person's situation and cannot be properly advised on through a forum (beyond general information).

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Fair enough. Was more of a prompt to look at all options for accountancy, not advice - maybe worded incorrectly.

If anyone thinks or suspects they're accountant is not up to the task, look around for a new one immediately. Accountants can be the difference of 000's, if not, 10's of 000's of dollars each and every year depending on your own situation. So there is no point sitting on your hands or saying/thinking I can't afford to pay a good one - like many I know say, even though I know they can afford it, they just don't want to pay for it.

Most likely it will pay for itself in the first year, the hard part is finding a good one. Ask around, ask friends that have business, ask local businesses around you who they use and their feedback. There are many ways to get recommendations, not just through the net or google lol

Most of all, why have loyalty to someone who is providing a service and charging you for poor performance? You're the boss, so be the boss!

imo