Put Extra Cash in your Pocket Every Fortnight
Did you obtain a large refund last financial year? What would you do if you can have them in advance?
End of financial year is always an exciting time for many of the investors. This is because they are able to claim the losses from repairs and maintenance, depreciation expenses, interests, agent fees, water rates, etc.
Those investors did not know that it is not necessary to wait until the end of every financial year to claim all the deductions of the year. Instead, you can get access to your refund in an advance by simply lodging a Pay As You Go (PAYG) withholding variation.
Announced in July 2000, a PAYG withholding variation enable employee to have the authority to request to reduce their tax withhold rate, i.e. increase net pay in each payslip to anticipate their tax liabilities.
This mean that they can enjoy the benefit of the deductions available to them regularly, rather than waiting until the end of a financial year for their tax refund.
Through a PAYG withholding variation, the estimated tax refund of the property investor for the financial year is identified. This allows their employers to withhold less tax out of their pay.
For example,
Jenny rented her investment property for $500 per week, or $26,000 per year. She has expenses on repairs and maintenance, agent fee, interest, rates, insurance and depreciation totalled of $40,000.
Says jenny taxable income is on the forth bracket (37%).
| $ | |
| Annual rental income | $26,000 |
| Annual expenses | $40,000 |
| Deductible loss | $14,000 |
| Tax refund (37% marginal tax rate) | $5,180 |
| Cash difference this refund could make applying PAYG per fortnight | $199 |
By selecting PAYG withholding variation, Jenny will receive an additional $199 in her fortnightly pay.
In the example above, you can see that PAYG withholding variation provide property investment more flexibility with their cashflows. Extra money throughout the year make it more convenient to control the cash flow, especially when there is unexpected expenses happen like, urgent repairs or maintenance. Even better, you also can use the extra cash to make more investments or pay the principal to reduce your interest liability.
Please note that the lodgement of PAYG withholding variation application does not mean lodging tax return. You still have to prepare your tax return at the end of the financial year to calculate the actual tax return.
To make PAYG withholding variation application process easier for you, Success Accounting Group have created a checklist for you to complete and return to our office.
Please download the checklist by clicking on the link below.
2017 PAYG Variation Client Checklist
If you are not sure if a PAYG withholding variation is suitable for your circumstances, please contact us now on (03) 8511 4047 or (03) 9583 0550 or email us on grow@successaccountinggroup.com.au.
If you’re not quite ready for that, dip a toe in the water and check out what property investors say about our service. The link to our testimonials is below.
Success Accounting Group – Testimonials
About Lan Nguyen
Lan is the Founder and Chief Strategist at Success Accounting Group, Melbourne based CA firm. In a matter of short 8 years she has built up a reputable Chartered accounting firm with 3 offices and a team of 6 professional accountants and support team members. Her mission is to provide Innovative and Strategic Financial advice to help her customers make smarter financial decisions today for a brighter future.
Success Accounting Group is for established business owners who would like help to grow a sustained business. As a business owner you understand what drives your business success with our accounting team taking care of the rest.
Success and Wealth
Success Accounting Group Pty Ltd
Oakleigh, VIC, 3166
