Your Success Club > Articles > Income Tax Withholding Variation - Get Your Taxes Back Before the Financial Year!

 

Income Tax Withholding Variation - Get Your Taxes Back Before the Financial Year!

For the people who are new to this I will briefly explain what Income Tax Withholding Variation is: PAYG income tax withholding variation (ITWV) is used for people on the PAYG (Pay As You Go) system, i.e. pretty much everybody who is on a salary. This just means that your employer is withholding some part of your salary base on your tax payable and sending it to the tax man, Mr ATO (Australian Taxation Office).

You might be thinking, what's the point of all this and how is this going to benefit you? Well If you have tax deductible expenses such as interest on an investment property, margin loan, land rates, water charges, property management expenses etc. then this will be useful for you. What usually happen is that you get a tax refund at the end of the financial year because your employer has withheld too much tax for the tax man (simply because your employer doesn't know that you have investment properties or other tax deductible expenses).

By completing a PAYG income tax withholding variation (ITWV) application, you are applying for all those investment deductions to be refunded during the year via reduction in the tax withholding that's been applied by your employer to your pay slips. This way it seems like you are getting more cash from your pay slips due to the reduction in the tax withheld. This money can be used for anything, hopefully you will use it to pay for those expenses when it happens or simply set it aside to offset interest or even earn interest in some high interest account, instead of sitting in the tax man, Mr ATO's bank account earning interest for them.

Once you complete this form, the ATO will tell your employer to make the necessary changes to your pay slips. So get on-line today and complete one, especially if you have deductible expenses! There are two ways of submitting the application:

  1. complete the e-form and submit it on-line (highly recommended because you get it done straight away)
  2. printing the form out and completing it yourself and 'snail' mail it to the ATO, if you don't know how to fill out the form ask you accountant about it. The form is actually very easy to fill out!

Example: Here's a quick example of how PAYG income tax withholding variation (ITWV) will help you: For simplicity i am going to assume the following:

BASE CASE

AFTER PAYG income tax withholding variation (ITWV)

So the question is will you be doing your PAYG income tax withholding variation (ITWV) this year? or at least find out from your accountant what this is all about!


Your Success Club > Articles > Income Tax Withholding Variation - Get Your Taxes Back Before the Financial Year!

Enter your details
*
*
*