Tax question ( first time online )

[snowy]

Hello

Well this is my first time online as I only registered 10 mins ago. Quick precis of my situation, I have spent numerous hours, months reading and obtaining information about purchasing Investment Properties so to become a self funded retiree.

My husband and I have had government jobs for the past 21 years and have previously ( a long time ago when we were 18 and then 24 ) bought two IPs that we ended up selling. We are again ready to jump into the property market to invest for the long term.

We are currently only 38 and I would particularly like my husband to finish work around 50. We have two beautiful children, 15 & 10.We have a mortgage of our own with appr $250,000 equity and are looking at purchasing one property within the next few months and hopefully many more , (I hope in the future).

Years ago we only got our tax refund annually but with a family I would very much like to have my tax refunded each payday to give my family a better cash flow. The problem is I know how much the Mortgage repayments will be taking into consideration rent, agents fees etc etc but what I don't know how to work out is what the tax deduction iwill be and my tax accountant is a little reluctant to give advice until after I purchase the property.

Is anyone able to help me work out the tax refund, do I need to submit a 221D, does anyone know a good property investment finnancial planner in the Nowra, NSW area??

Thankyou so so much

This website is inspiring and the help and support that I have witnessed is absolutely wonderful.

Many thanks
Lisa
PS Hope this doesn't sound to silly and yes I am blonde!!

 

[Mry]

I find it a little hard to believe that your accountant won't give you information about the property prior to purchase. Accountants do something called 'tax planning' which is done in advance of potential activities.

The amount of information you are after makes me think you next courses of action should be one of the following -
(a) Bulldoze your accountant into giving you more information.
(b) See another accountant
(c) Play around with PIA (Sommersoft software package) to see how it affects your position.

If you see your accountant, take a few potential scenarios along (eg a 5 year old brick home worth $300,000 returning 5% on market value rental return per year, old Queenslander etc). Ask to do up a small budget with him/her and see how it affects your cash position per week and how it affects your tax. Any accountant should be able to do that.

Julia Hartman also wrote articles in the last two editions of Australian Property Investor on working this stuff out.

I do think some good advice would help you out immensely, especially since you are starting out.

 

[Brinkdude]

Hi Snowy

There are no silly question here.

If you do a search on previous posts you will find alot of information about depreciation schedules viz saving salary through the tax system.

Type in a search for 1515 (the new name for the form in the ATO database for Income Tax Variations) and you will find 17 posts on the subject. Type in 221d and you will call up 71 posts

The search engine is your friend

You appear to have enough equity to start buying a few IP's. A good morgage broker will assist with the financing options.

Cheers and welcome to the forum

 

[snowy]

Thankyou very, very much.

Regards
lisa

 

[AmandaBS]

Hi Lisa,

Doing a variation is just like doing a tax return so it really depends on your personal situation of income and rebates. Just a word of caution though the ATO will fine you if you overclaim on the variation so its best to be on the conservative side. You'll also need to do a new application each year.