Tax strategy playbooks / management consultant
$80k–$200k/yr · 6 strategies
High-billing consultants typically carry home-office claims, client entertainment costs, and a provisional tax obligation. At $100k+ income the provisional tax piece alone is worth understanding properly. Getting the entertainment split right and reviewing incorporation at scale are the two most common improvements.
General information, not tax advice. Worked examples use fictional personas; figures are illustrative.
Mia writes from a spare room at home and invoices around $30k a year. She'd never claimed anything for the room itself.
She measured the office floor area once, put it in her tax profile, and used the IRD square-metre rate. No power bills or rates notices to keep.
For someone in Mia's position, the square-metre rate often turns a forgotten spare room into a meaningful annual deduction.
Illustrative example — not a real customer. Figures are based on your numbers and rounded.
PayWren finds this automatically: connect your invoices and expenses and the tax engine flags this strategy when it applies to your numbers, on the Solo plan.
Priya takes Wellington clients to lunch most weeks and invoices around $30k a year. Every meal was sitting at 100% deductible.
Her accountant applied the 50% entertainment limitation — most client meals are only half-deductible unless they qualify as a working meal.
Her return went in accurate, with no over-claim for IRD to unwind later. The half that is deductible is still claimed in full.
Illustrative example — not a real customer. Figures are based on your numbers and rounded.
PayWren finds this automatically: connect your invoices and expenses and the tax engine flags this strategy when it applies to your numbers, on the Solo plan.
Priya's first good year consulting, invoicing around $30k, left her owing more than $5,000 of residual income tax — which made her a provisional taxpayer the next year.
She paid the three standard-uplift instalments on time rather than gambling on her own estimates.
That kept her in the safe harbour, so no use-of-money interest on the year-end square-up. The instalments were never a shock because she'd set money aside monthly.
Illustrative example — not a real customer. Figures are based on your numbers and rounded.
PayWren finds this automatically: connect your invoices and expenses and the tax engine flags this strategy when it applies to your numbers, on the Solo plan.
Mia invoices around $30k a year, and her phone and home internet do double duty — client calls by day, everything else after hours. Both were claimed at 100%.
She settled on a defensible business-use percentage with her accountant and applied it to both the income tax deduction and the GST claim.
The claim now reflects reality. If IRD ever asks, the percentage has a straight answer behind it, and there's no over-claim to repay.
Illustrative example — not a real customer. Figures are based on your numbers and rounded.
PayWren finds this automatically: connect your invoices and expenses and the tax engine flags this strategy when it applies to your numbers, on the Solo plan.
Aroha gave to IRD-approved charities during the year and kept every receipt.
After year-end she filed an IR526 — a separate form from the IR3 — listing each donation.
IRD paid a third of it back as a donation tax credit.
Illustrative example — not a real customer. Figures are based on your numbers and rounded.
PayWren finds this automatically: connect your invoices and expenses and the tax engine flags this strategy when it applies to your numbers, on the Solo plan.
Priya's consulting cleared well past $78,100, invoicing around $30k a year, and someone told her a company would slash her tax.
Her accountant modelled it honestly: a commercially realistic salary taxed at her personal rates, the balance retained in the company at 28%, less the extra compliance cost — and flagged that most of the gap is deferred, not saved, because imputation taxes the dividend at her marginal rate when she draws it.
The model showed the salary had to be a commercially realistic, genuine market reward, not an artificially low figure to divert income — that pattern is what IRD attacks under the anti-avoidance rule (Penny & Hooper) — and that most of the apparent saving was really a deferral she'd pay back when she drew the profit out.
Illustrative example — not a real customer. Figures are based on your numbers and rounded.
The salary paid through the company must be a commercially realistic reward for the work actually performed; retaining profit must serve a genuine business purpose (reinvestment), not tax deferral alone. Paying an artificially low salary to shift income to the 28% company rate is the exact arrangement IRD attacks.
PayWren finds this automatically: connect your invoices and expenses and the tax engine flags this strategy when it applies to your numbers, on the Solo plan.
Connect your invoices and expenses and the tax engine flags which of these strategies apply to your specific numbers, no manual review required.
All playbooks: tax-strategies