Hi all,
Have been reading Building Wealth in Chamging Times by Jan Somers (written back in 1994) and she mentions Section 221D of the Tax Act which allows you to claim your annual tax refund in the form of a reduction in your PAYE tax (i.e – basically doing your tax return weekly instead of yearly).
Do any of you learned people know if this is still available? I’m only 22 so from a first time investor’s point of view this would be ideal.
Your advice/knowledge is more than welcome!
Cheers
MarcusElectric
Marcus,
You have to know you’re going to have a refund, and state why you will and approximately how much it will be (at least you did when I had one some years ago).
And the ATO doesn’t have to grant the exemption, but if it’s for legitimate reasons, then I don’t see why they wouldn’t.
GP
it is one of the key ingredients to neg gearing! definitely use it if you can
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And if you are overly optomistic and get it wrong the ATO Can and will fine you.
i use it, the only downside is you really have to have all your paperwork sorted. i give the bare numbers to the accountant, and at tax time add on other expenses. this way i know i am not over estimating my tax return. works very well though costs me a couple of hundred dollars to get it done.
shaunLead, Follow or get out of the bloody way
Thanks for your feedback everyone. Do you know what it’s called exactly? I’m struggling to find “form 1515”
Cheers,
MarcusElectric
I have used this over the past year with some success.
You don’t have to use an accountant. All you need to do is download the forms and in competing them essentially do a pre-emtive return for the year ahead.
The ATO assess your future liability against current PAYG tax paid and amortise the remainder over the remaining months in the year. They then send a letter to your employer with your revised tax rate (mine was 2%).
It has been great, especially as I was in a role with reasonable allowances. The PAYG variation overrides any allowances and as such you can ask your employer to remove them. This means that if you leave that job all benefits are paid in full not minus the allowances.
Needless to say I left my job, got the full benefits and was happier for it. Not to mention the use of the extra cash ($800 pcm).
I try to be conservative and do it in the 2nd or 3rd month of the fin yr so that there’s a base of tax there and the amortised remainder is negligible.[biggrin]Good luck with it.
Hi
The form is called a F2036.
I rang the ATO 2 weeks ago and could get it posted out or I can download it from their site. Anita Bell of “Your Investment Property, how to choose it, pay for it and triple your returns in 3 years-by someone who did it in 2” fame, considers it the best pieces of paper to come out of the ATOAlison Richards
Hi all,
The form you require for PAYE tax payers is available from the ATO at http://www.ato.gov.au/corporate/content.asp?doc=/content/43572.htm
As others have said the commissioner is not obliged to allow the payroll deductions and as such it is in your interest to ensure you do not crib your tax responsibilities. I prefer to leave some deductions up my sleeve for the end of financial year return and as such get to enjoy the benefits of a reduced pay period tax rate and the end of financial year lump sum.
Electronic submission results in a faster turn around time and if your situation is relatively straightforward then you can submit the application without the assistance of an accountant. Ultimately it depends upon your situation and level of confidence.
Derek
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Hi Marcus,
Just to let you know the 221d form is still extremely relevant for your investment properties and tax.
Make sure your accountant submits one on your behalf and does so evey 1st of July. Dont let the govt have yoour money , not one day more. Keep it in your account and pay less interest on your morgage.
Keep well JReid[jerry]You can complete it online, here’s the link:
http://www.ato.gov.au/corporate/content.asp?doc=/content/71506.htm
As the other posts have mentioned though, if you over estimate the expenses by, I think its 10%, then not only will you need to repay this tax but also a fine. Usually if you’ve been fined one year they won’t allow a variation the following year.
AmandaBS
http://www.propertydivas.com.au
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