- AmandaBSParticipant@amandabsJoin Date: 2005Post Count: 549
We've just added a new document to our website that I thought I'd share with you all:
What is an Income Tax Withholding Variation?
Income tax legislation provides that in certain special circumstances a taxpayer can apply to the Australian Taxation Office (ATO) to vary the amount that an employer deducts from wages in the form of income tax,( ie PAYG.) (Previously known as a “221D Variation”)Such a circumstance applies to holders “negatively geared” properties. When the ATO accepts such an application to vary PAYG, it is termed an “Income Tax Withholding Variation” or an “ITWV” for short.
Why apply for an ITWV?
The main reason for lodging an ITWV is to prevent overpayments in tax by reducing the amount of tax deducted by an employer from your wages. This in turn means that there will be no need to wait until the end of the financial year for a tax refund from the ATO.
How do I lodge an ITWV application?
Forms NAT2036 are now available online or from your accountant. You may complete and lodge them yourself or your accountant can prepare and lodge the forms for you. A new application form must be lodged each financial year and takes approximately 28 days for the ATO to process.
What happens next
Provided your form has been correctly completed, the ATO will notify both you and the payroll office of your workplace of any tax variation.
A word of caution…
It is vital that the total tax withheld during the financial year is sufficient to meet the full year’s income tax liability, so it is therefore advisable to be conservative in estimating the amounts. Penalties may apply if you receive a debit assessment of $500 or more.
For further information, contact 1300 360 21 during normal business hours. Upwards Variation forms. NAT 5367 are also available.http://www.ato.gov.au/individuals/content.asp?doc=/content/00096541.htm&page=2&H2