Hi All,
I've received a notice from the ATO after lodging my 08/09 tax return which has left me very confused.
The notice said, that according to my 08/09 tax return, I have 'business/investment income which now requires me to pay quarterly PAYG installments'. Based on their assessment, they calculated that I had earned $9000 from rental income and interest on term deposits, and as a result, they will be requiring me to pay the annual equivalent of 41% to the tax office in PAYG installment, this is a total of approx $4,000, in $1,000 quarterly installments
Now, to set the scene, I have worked for the same employer for 7 years and I pay my PAYG tax fortnighly, it automatically gets taken out of my pay, as it would be for most people I imagine. The only investment property in my name is a unit I have with my partner (50/50) which in recent years has become positively geared. I understand that I have accrued $9000 from rental + term deposit interest, but what I don't understand is why isn't this just added to my taxable income when I do my tax return at the end of financial year, as it always has? The tax rate I pay on my taxable income is far less than 41%, why are they requiring I do it this way?
To make it more confusing, our investment property is now negatively geared, so the installments they are asking me to pay based on last year's interest earnings are totally wrong. I will be getting close to 0 from rental or interest on term deposits in the coming year.
Can any of you savvy investors / accountants / financially knowledgable people enlighten me????
Thankyou!
I've received a notice from the ATO after lodging my 08/09 tax return which has left me very confused.
The notice said, that according to my 08/09 tax return, I have 'business/investment income which now requires me to pay quarterly PAYG installments'. Based on their assessment, they calculated that I had earned $9000 from rental income and interest on term deposits, and as a result, they will be requiring me to pay the annual equivalent of 41% to the tax office in PAYG installment, this is a total of approx $4,000, in $1,000 quarterly installments
Now, to set the scene, I have worked for the same employer for 7 years and I pay my PAYG tax fortnighly, it automatically gets taken out of my pay, as it would be for most people I imagine. The only investment property in my name is a unit I have with my partner (50/50) which in recent years has become positively geared. I understand that I have accrued $9000 from rental + term deposit interest, but what I don't understand is why isn't this just added to my taxable income when I do my tax return at the end of financial year, as it always has? The tax rate I pay on my taxable income is far less than 41%, why are they requiring I do it this way?
To make it more confusing, our investment property is now negatively geared, so the installments they are asking me to pay based on last year's interest earnings are totally wrong. I will be getting close to 0 from rental or interest on term deposits in the coming year.
Can any of you savvy investors / accountants / financially knowledgable people enlighten me????
Thankyou!
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