Do you wait untill tax time ?

[RicePud]

Great post Rixter, that was exactly my thinking when we purchased our 1st 2 IPs earlier this year. We could fund the shortall on 1 IP only our of our after tax dollars, but if we completed the tax variation form we could fund 2. So, we've got 2 IPs working for us instead of 1. Why let the tax office hold onto your money for a year.

Ricepud

 

[The Y-man]

The ATO dont pay you interest for holding your money thats rightfully yours through out the year.
.

Thoroughly agree.

Cheers,

The Y-man

 

[JamesGG]

Its better to get every single dollar working for you as fast and as efficient as you possibly can.

Hiya,

Agree completely mate. However, for many people, the concept of not lodging a variation acts as a forced savings method. Rather than letting that extra income slip through the cracks throughout the year, for some it's better to leave it with the ATO until July and then use the fat stack of cash for something worthwhile at the end.

Not ideal, perhaps, but better than nothing. I much prefer to get those dollars in my pocket now

Cheers

James.

 

[Stella]

Rather than letting that extra income slip through the cracks throughout the year, for some it's better to leave it with the ATO until July and then use the fat stack of cash for something worthwhile at the end.

Thats what we are afraid of doing. We are only relatively new at living on a LOC & are planning on waiting till refund time - for this year anyway, until we make sure the discipline is in place so the benefit is not absorbed into our daily living expenses.

Cheers
Stella

 

[flatout]

We also wait until tax time, mostly because both my partner and I are contractors so we don't get any holiday pay. We tend to use the bigger portion of our tax refund to pay for our holiday. Forced savings . Late last financial year we were a bit cash strapped though so I ended up doing a withholding variation for the first time just too boost our cashflow. Bottom line is we prefer the lump sum but if you need the weekly cash injection then take it.

Flatout

 

[nats12]

why would you wait until tax time. It's a bit of effort to fill out the form but it brings the money into your cashflow imemdietly to offset against debt. The ATO doesn't give you 7% interest on your funds so it's worth having the cash as soon as you can get it.

it also stops me from getting a big refund at the end of the year and thinking about spashing out on big ticket items or holidays.

 

[wylie]

It depends on each situation. We wait for the end of the year and get the fat cheque which goes into our PPOR loan.

We are not "spenders" but with three kids, uni, private school and one coming up soon for private school, if we did a variation, some of it would be spent.

End of the year, it goes staight into the PPOR loan, every last cent.

It works for us, and we need to know that every cent is available for prepaying interest next year.

Wylie

 

[Bangers]

This is my first fiscal year with an IP, and I am waiting till tax time to do mine. My HECS is paid off end of this financial year too, so I'm definately looking forward to having more moneys to put directly into my IP(s)'s!

 

[Body-By-Jake]

Looking into this at the moment however with my income being Salary & Commissions it's difficult for my employer to deduct the correct amount of tax each month as the commissions vary from month to month - sometimes it's a lot, sometimes nothing. Probably the tax variation is excellent for those on $100,000 PAYE situation!

 

[devo76]

I bought my first IP a year ago and since it was neg geared i played it safe for cashflow reasons and got my return each week instead of tax time. I then automatically transfer the extra money in my pay into my IP account so i dont see it. That leaves me with a shortfall of $30 dollars per week for the ip including costs. I prefer it this way

 

[want2bewealthy]

This will be my 2nd year of IP tax and at the moment, Im fine with paying the outgoings and receiving a lump sum at tax time, who knows, things might change sooner or later.
It doesnt bother me either way.

 

[landlubber]

Please don't wait until tax time !!

Fellow forumites and tax-payers.... I am most concerned at the number of responses that say " We wait until tax time". Please don't do this ! Please get your tax adjusted weekly/monthly by your employer and get the cash in your hand as QUICKLY as you can. I'll explain why.

If you are waiting until the end of the tax year AND for some un-forseen reason ( like audit !) you happen to get into a "situation" where the ATO disagrees or reckons you owe them money they will with-hold your TOTAL refund until the matter is "sorted". The matter may be entirely un-related to your IP business. It can come "out of left field". But I'm here to tell you it can be VERY painful.

And ..further..if you have ever read the tay-payers charter that the ATO publishes about "fair treatment" etc ...it is total crap. If you get into a "barney" with the ATO it is "all gloves off" and ONLY THEY decide what they will and won't accept. If you want to feel totally powerless, take on the ATO !!

Don't risk it . Unless you're as big as Harry Triguboff and can ante-up for the legal action , GET THE CASH IN YOUR HAND FAST.

LL