Does anyone have any advice on pro’s & con’s of using a tax variation on my salary? How does it work? How do i apply for it? Is my employer compelled to oblige?[blink]
Misty..
Form used to be 221D ( lot of old posts on this topic ) now is 15-15, speak to your accountant.
Margaret Lomas promotes this approach, i believe Yack ( from memory ) uses it also..
Noel Whittaker suggest not to use it as a little each week will surely be wasted, better to have a lump sum return..
s’up to you..do you want more $ in hand now or lump sum when you have rates etc etc coming in and you may need it..?
Or put a large ‘Chunk’ of your non-deductible loan with your return..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHi Misty,
We use a section 15-15 income tax withholding variation to maximise our cashflow throughout the year. This approach is best used by PAYG income earners.
The process is relatively straightforward but it does pay to leave some slack in the system so that you have some leeway in your favour.
The variation is not an automatic right and as such the Commissioner is not obliged to grant your application. They can be put out if you owe tax at the end of the financial year – we tend to overestimate our income and under estimate our expenses to provide the leeway and leave all work related claims to the end of the financial year.
I have no doubt that you payroll officer will comply with an ATO saying ‘reduce Misty’s tax rate to x% effective’.
As with all matters tax the onus is on you to get it right.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
thanx guys.i’m off to see accnt.[biggrin]
Misty
The withholding tax variation form can be accessed online by the following link:
“www.ato.gov.au/individuals/keywordlist.asp?k=Variation”.The ATO provide an online form that you can fill in, save and edit at your leisure and submit when ready online to the tax office. The ATO then process the form and notify you employer pay staff in about 2 weeks from submitting your online application. This is a much better option than filling out the form and mailing. Turn around time on this could be up to 4 weeks with ATO.
The turn around time between notifying the ATO and effective date on your pay, will increase if ATO notification misses the next pay days cutoff for variations to your employer.
As your financial situation changes, or you re-calculate your previous submission, new variations can be sumitted to the tax office. Another reason to submit online applications that can be actioned promptly.
The variation form is similar to TaxPack or
E-TAX forms so you need estimate your annual income and estimate all your significant deductable expenses.You can under estimate your expenses if you wish to be conservative, but I like my claim to be accurate, as why should I over-pay tax contributions? This strategy maximises funds available for expenses or interest on my funds.
On the other hand if you over estimate your expenses and underpay your withholding tax, then the ATO does allow a small margin without penalty. As after all, this variation is an estimate only, of all your income and deductable expenses.
Tasman
Thanx for such an informative response Tasman, esp. the link! Are you sure your name isnt “taxman”??[biggrin]
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