Hi all. Yesterday i saw my accountant who filled out the form that allows my employer to take less tax out per pay and recieve a smaller return at tax time. (sorry i forget what this set up is called) I did this as i would prefer the money weekly so i can use it to pay of the loan weekly instead of a larger return at tax time.Now today i was told that i have been promoted and i now recieve a extra $10,000 pa. What should i do now.Do i contact the my accountant to inform the tax man of the changes which will probably add a little more cash weekly as it pushes me higher in a tax bracket or can i leave it be and recieve a little more at tax time on top of my weekly return. Can i do that?
Forgot to add i have gone this way as i have just purchased a negative geared IP And recieve substantial tax breaks.
You can do either. Considering it's nearly the end of financial year I'd leave it. If your payrise doesn't coincide with start of new financial year you will be given a bit more tax back for this financial year also.
So its not illegal to leave it the way it is even though the details have changed. I guess its ok as its on the safe side as a pay rise will entitle me to a larger return not a smaller.So if i correct the change i will recieve a little more weekly or if i leave it. I will get the same amount back weekly as first worked out plus a small return at tax time including the amount worked out from the pay rise difference. If this is the case i think ill leave it.
Here's some more info. http://www.ato.gov.au/individuals/content.asp?doc=/content/00096541.htm
The ATO is taking applications now for 2008 so I assume this is the application you have just signed. Best to give your Accountant a call as any tax bill owing at the end over $400 will attract a penalty.
Hi devo76, I agree with Amanda. I just realised you've only just filled in the form. The cut off is 15th May to lodge for that financial year so I hope you read the link. -Sorry.
Really??. You have to fill out the form by the 15th to set it up for the 07/08 financial year. What if you buy a IP half way through a year and want to do it. Do you have to wait until the next financial year to start.
Hi Devo76,
I'd probably leave it as it is, but this is my opinion only. If you set it all up – as you have done – and then get a pay rise, then you effectively get the best of both worlds.
It kind of comes down to a choice – pay less tax now and thus not get a tax return at the end of the financial year, or pay more tax now and get a tax return cheque at the end of the financial year.
Now that you've got a payrise – or are about to – you potentially will get both : more cash per week AND a tax refund.
Thanks,
BDM
No devo76. If you want more info have a look at the link. There's probably about 6 pages about the form. 06/07 cutoff would be 15th May 07. 07/08 cutoff would be 15th May 08. Anyone wanting further info on this topic use the above ATO link. I'm not an accountant. I've spoken to ATO previously about this subject. If your concerned, contact ATO or your accountant. Linda
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