Hello,I am trying to confirm some advice I have received, namely that the negative gearing on an investment property can be paid out of the tax taken from your pay every fortnight / week. This would allow you to keep all of your take home pay. Eg – If i am taxed $500 from my pay every fortnight and my negative gearing cost is $400 a fortnight, instead of all my tax going to government coffers only $100 would and the rest is used to help me pay my property off. The only thing is you do not get a lump sum figure at the end of tax time as you normally would. It's called pay as you go.any help greatly appreciated.
Yes this is correct.
You are able to get your tax back throughout the year in your fortnightly pay packet. Get your accountant to submit the necessary paperwork to the ATO.
You have to ensure that you estimate correctly or you will find yourself with a tax bill at the end of the year. If you expect to get 15K back at the end of the year it is a good idea only get 10K back fortnightly so you don’t get yourself in trouble and you also end up with a little bit of a lump sum.
It’s called a PAYG adjustment.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
But then you forgo the joy of tax return time
No, I’m only joking. If cash-flow is an issue then the variation can be very handy. I haven’t personally lodged a variation form before but my understanding is that it’s quite easy to do yourself (so perhaps suss it out before going to the accountant).
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Welcome willo352.
Yes, the ATO allows ordinary Aussie's to reduce or vary their tax in the weekly paypacket on a leveraged investment property. It's called a tax variation form 221d. Have a look at the link below and this may help you to understand further. Word of warning though: the ATO is anal about a 221d's figures being projected reasonably accurately. If you make significant errors you can go to jail for tax avoidance/over claiming.
LOl dont know about jail.
They would just ask for a adjusted + penalty $$
Either way- get a accountant involved and get it right the first time and every time.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Jamie M wrote:But then you forgo the joy of tax return timeNo, I’m only joking. If cash-flow is an issue then the variation can be very handy. I haven’t personally lodged a variation form before but my understanding is that it’s quite easy to do yourself (so perhaps suss it out before going to the accountant).
Cheers
Jamie
Jamie im guessing your self-employed…unfortunately not available to us ppl due to irregular income
.Sigh,..
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
All good – my preference has always been to claim at the end of year. Nice time to plan a holiday
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
If you are self-employed (sole trader) you can do the same thing on your BAS Return. Only problem is that you probably don't know your earnings so it makes it a bit hard.
The actual name for this is the PAYG Withholding Variation Application. Or 15-15 form. The name changed from 221D some years ago. Here is the link from the ATO's website if you are interested in doing it yourself.
http://www.ato.gov.au/content/00188348.htm
Willo352 – if you are looking for someone to do it for you then I may be able to help. My business does this for people. I call it a Cashflow Report. If you are interested have a look at my website http://www.damaccountingservices.com.au and contact me there.
Thanks everyone for your help, it has assisted me greatly.
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