Met some new clients Friday - SS members. Unfortunate they met an accountant not property savvy. Appears to have stuffed up their PAYG variation and over complicated it. In reality a PAYGV should be just a broader part of the client tax affairs...Nothing exceptionally complex.
Some lessons in PAYG Variations I thought it worth posting on this issue.
What is a PAYG Variation ? EMPLOYEES who have tax withheld from wages who have negative geared IPs may CHOOSE to apply to lesser tax to be withheld each week/FN/month rather than receiving a deferred and large deduction.
What info is need for a PAYG Variation ?
Its basically a pre-estimated tax return. But also requires currnet year to date payroll and tax info. Based on this the ATO adjust tax rates to a fixed %%. So taxpayers need estimates for the year plus a current payslip with YTD values.
Cost ? There are three possoble costs.
1. Accountant fee if they assist. I normally charge $160+
2. Do It Yourself. Free... Online with ATO.
3. Penalties if your get it wrong. PAYG variations that under estimate tax can result in panlties. I prefer to ensure a year-end refund still occurs to avoid this issue.
Benefits
- Cashflow smoothing rather than a huge refund at year end.
Do I have to do this ? No. No way. Many clients of mine prefer theri huge tax refund. Others like lower tax each pay period and also like a small refund at year end. Its personal choice.
Some lessons in PAYG Variations I thought it worth posting on this issue.
What is a PAYG Variation ? EMPLOYEES who have tax withheld from wages who have negative geared IPs may CHOOSE to apply to lesser tax to be withheld each week/FN/month rather than receiving a deferred and large deduction.
What info is need for a PAYG Variation ?
Its basically a pre-estimated tax return. But also requires currnet year to date payroll and tax info. Based on this the ATO adjust tax rates to a fixed %%. So taxpayers need estimates for the year plus a current payslip with YTD values.
Cost ? There are three possoble costs.
1. Accountant fee if they assist. I normally charge $160+
2. Do It Yourself. Free... Online with ATO.
3. Penalties if your get it wrong. PAYG variations that under estimate tax can result in panlties. I prefer to ensure a year-end refund still occurs to avoid this issue.
Benefits
- Cashflow smoothing rather than a huge refund at year end.
Do I have to do this ? No. No way. Many clients of mine prefer theri huge tax refund. Others like lower tax each pay period and also like a small refund at year end. Its personal choice.
