How can I best use my company's $165k profit to minimise tax?

T

ThrowPuggle

New Member
I run my company as the only employee. Our turnover is around 300k. I pay myself about 135k to stay in the tax bracket. I have a personal mortgage a bit over 400k. I'm chasing good options on how to best use the company profit. Any ideas? A few I've thought of…

  • Pay it out and pay 37 cents in the dollar tax.
  • Div 7A loan it to myself to offset my mortgage and pay the company back.
  • Invest it in shares for the company.
  • Invest it in something else for the company.
  • Buy equipment for the company to lower profit.

Open to other smart ideas…?

Cheers!
 
A 79 Cruiser with the full ARB catalog fitted is a solid choice.

It’s a reliable workhorse.
You can get out on weekends and enjoy what you’ve built.
Live a little!
Or go the boring route and invest the money.
 
Ugh, I know it's a hassle, but seriously talk to your accountant about setting up a special purpose company for investing, then have your trading company loan money into it. Also, you could look into buying commercial property through your SMSF and then renting that property back to your business. Totally a thing worth exploring, even if it makes your head spin.
 
Div 7A Safe Harbour rate is 8.37% rn , so nah, skip that.

Got a partner on low income? Issue them non voting, non capital, dividend eligible shares & use up your franking credits. Just gotta check your company constitution – see if you have a share class you can use (or amend it).

Oh, and don’t buy investments in your operating company that’s just extra for creditors if things go pear‑shaped. Get a bucket company as recommended
 
You absolutely must pay yourself $200k a year. That leftover cash? It goes straight to annihilating your home loan or at least offsetting it. Yes, you’ll fork over more in tax who cares? Long term, smashing that house loan down saves you far more. End of story.
 
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