PAYG Income Tax Withholding Variation Application (ITWV)

V

val1239

Hi,

I am brand new to this forum and was interested in finding out about ITWV.

Has anyone applied for this Tax Withholding, if so, how does it work in simple terms?

Appreciate it.

Val.
 
jaycee

jaycee

you download the form from the ATO, fill out your detials & post it off. They work out how much tax you should pay for the financial year and instruct your work's payroll to charge more/less till the end fo the financial year accorgingly. You receive a letter telling you how much the adjustments are etc.

Seems to be pretty quick, I beleive you can send in a new form up to every month
 
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Rob Williams

Rob Williams

The ITWV is the greatest cash flow tool for PAYG investors. Instead of waiting a year for a return, based on negative gearing losses, the tax benefits are realised each pay cycle by way of a reduced tax rate.
 
jaycee

jaycee

Like Rob said..

You get taxed less for the rest for the year so that if your calucation are right, you haven't overpaid any tax, so you dont get a tax return, instead you get the $ in your weekly net pay to spend straight away.
 
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L

Later

ATO is very quick to notify your employer. Ours was done within 2 weeks. I figure the money is better sitting on my mortgage reducing the interest payments than sitting in the ATO's bank account for 52 weeks earning them interest.
 
Rob Williams

Rob Williams

jaycee said:
Like Rob said..

You get taxed less for the rest for the year so that if your calucation are right, you haven't overpaid any tax, so you dont get a tax return, instead you get the $ in your weekly net pay to spend straight away.
Click to expand...

I like to understate mine a little so I get a tax return. It's a bit of a long standing tradition of mine that I do certain "fun" things with my annual return, so I like to maintain the tradition.
It's also good to have a bit of a buffer in the ITWV figures in case you get unbudgeted rent increases or rate rises during the year. The ATO don't like it if they give you too much tax relief during the year and have to ask for some back when you lodge your return.
 
Z

zapoix.

Im with rob i will always underestimate just so i do not have a bill at end of year
made that mistake 8 years ago with child care eded up with a 4k bill that hurt
 
S

stinadaze

OK so how do i calculate what my rate should be then?

my husband is about to change jobs and income levels (and tax rates) will be changing. this is happening in May.

also, as of next week or so we should have our first IP rented!

so there are a couple of changes going on all at once and i would like to make sure that i am making the most of the PAYG!

thanks :)
 
Rob Williams

Rob Williams

The ATO work out the rate. You just provide details of income, rent., interest and other expenses plus depreciation etc.
I provide accurate fugures for all the hard numbers, but the soft stuff, like depreciation etc I usually estimate (based on previous years figures) and understate by an amount I feel comfortable with.
 
tobe

tobe

The form is basically the same as the tax return, just in advance. They ask what your current/expected income is, they ask you to attach a payslip, current rent, estimate of rental and work expenses, add it all up and estimate your tax refund for the year, then the ATO contacts your employer and asks them to give you this in 12, 52nd or 26th incremenents depending on your pay period.
You can ask your accountant to help with the forms, though they may charge a (tax deductable) fee. Its worthwhile using an accountant if you dont feel comfortable I reckon, at least for the first time. They can work out how much you will be getting back, and perhaps underestimate your expenses a bit so you dont need to pay any tax at the end of the year.
 
Gordon Farkus

Gordon Farkus

I remember someone advising the forum last year when the 2009/10 form was available for downloading. Hopefully some kind soul will do the same to advise that the 2010/11 form is up...

(Yes, I could check the ATO every day from May/June myself, but I assume that if you've submitted an ITWV before - I haven't -then you're quickly advised via email alert or something similar?)
 
S

stinadaze

thanks for your replies. Seeing as its nearly year end i might not vary it. I'll fill in a "dummy" form and see if i manage.

I'd love to be able to give this to my accountant but im not happy with her service/fees but don't know who i could go too so I'm slightly stuck!!

I'll give it a go and might just ask here again when i get stuck :D
 
Rob Williams

Rob Williams

It's not hard. But it's not intuitive, either. There are people here who can give you some general advice on completing the form.
Relax. This is supposed to fun. Don't forget that!
 
Rob Williams

Rob Williams

val1239 said:
Great replies guys. So you must have an investment property to be able to vary your tax?
Click to expand...

Or other negative geared investment.
There's also a form for people who get car allowances etc so they can claim expenses via a special ITWV.

But don't tell everyone about the ITWV. The positive cash flow brigade don't get Fed Govt assistance to build their portfolio. They will feel like they're missing out. So Sshhh Secret Squirrel :)
 
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