Hi Folks,
Just wanted to find out if many of you have done the Income Tax Withholding Variation? I know the idea of Get Your Taxes Back Before the Financial Year sounds great but many people including my accountant indicates that there is too much effort (translating to cost) involved. Moreover, it your estimates are incorrect (I believe you get a leeway of 10%), you could be charged a penalty as well – is that true?
Do provide me your views / insights in regards to this topic as I’ve been doing the yearly lump sum returns during each financial year.
Cheers’
NM7Why is it too much effort? I don't do it myself, but I know friends who do and it doesnt cost anything and is easy to do.
Cheers,
LukeI do mine myself online, it's easy and free, you don't need an accountant to do it.
HTH
Ditto above – just make sure you slightly underestimate expenses and overestimate income so you never end up with a tax bill at the end of the financial year.
If you are wage earner with steady income and not a contractor, small business owner or someone with widely varying income the process is very easy indeed.
I thought it was only one form that needed to be lodged? Can’t be too much effort.
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]
Hi NM,
Sounds like your accountant has put the PAYG Variation in the CBF basket. Maybe he/she can only work from black and white information you provide rather than try and do some calculations projecting forward.
Go to ATO website and download th variation form and check it out yourself. It is easy to fill in. I think it will be available from May for 2012/2013.
Some people prefer a lump sum.
Some would prefer to get the money back first. If you need some more cash flow, tax variation would help you a lot.Perhaps you can get accountant to do it for the first time, so that you can get a rough idea how it all works. Then on the subsequent years, you can just do it yourself.
Hi Folks,
Thanks for all the information provided and I will surely check out the ATO website to get more information. Do you know if you can update your estimate a couple of times over the financial year in case circumstances changes; ie. salary rise, partner going on maternal leave, getting lump sum bonuses, etc?
What happens if one overestimates expenses & underestimates the income to the point that they end up with a tax bill? Do you get penalised for the incorrect estimates?
Sincere appreciate to all in providing your feedback / point of view.
Regards,
NM7You can update the variation if your circumstances change.
if you overestimate expenses & underestimate income, not sure if there will be penalty……
NM7 wrote:What happens if one overestimates expenses & underestimates the income to the point that they end up with a tax bill? Do you get penalised for the incorrect estimates?This happened to us last year, got a payrise but didn't update with the ATO, there was no penalty, we just had to pay the tax bill which was a couple of hundred dollars.
I am a Property Accountant and have done several Income Tax Withholding Variation forms for clients. There are some common mistakes that people make when they do it on their own, but it isn't overally hard. When people have several investment properties in joint names they find it easier to have someone else do it. <moderator: delete advertising>
DAMProperty | DAM Accounting Services
https://www.damaccountingservices.com.auI have started doing it this way as I used to treat the lump sum refund as a bit of an end of year thing as opposed to getting it as I go. That’s all changed now for me as I have had a terrible year with the ATO, that is not over yet. Anyhow got my accountant do do a variation and now I don’t pay any income tax for the rest of the year. It is best that you get your money off, of them, as soon as you can because if they find a reason to delay giving you a large refund back, it can take a very long time for you to fight tooth and nail for every cent back from them. Even if you get the funds in the end it could tip you over if you were relying on a prompt refund to begin with.
As Paul Hogan said the ATO are like the Taliban.
Dont know if it is true but the fact that you are getting your deduction as you go as opposed to a large lump sum that the ATO may try and hold back there may be a lesser chance of being audited.
Just had my Objection to the ATO allowed. Party……………………………they are still a bunch of bar stewards and definitely stick to the PAYG variation.
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