PAYG Income Tax Withholding Variation – The Quickest Way To Increase Your Cash Flow As A Property Investor!

PAYG Income Tax Withholding Variation – The Quickest Way To Increase Your Cash Flow As A Property Investor!

Are you an employee?

Did you earn a tax return last financial year?

Then you are probably eligible for the governments PAYG Withholding Variation, which is by far the quickest and easiest to legally increase your week-to-week cash flow as an employee and investor.

Case study: Ben Everingham from Pumped On Property.

What is the PAYG Income Tax Withholding Variation (ITWV)?

An Income Tax Withholding Variation is an annual application made to the ATO to vary the amount of tax withheld from your salary each pay by your employer.

This variation is valid for the entire financial year.

It simply means that a taxpayer who is entitled to a refund at the end of the year can access the funds each pay period, rather than waiting until their annual tax return is completed and lodged.

Case study: Ben Everingham from Pumped On Property.

I was recently made aware of the benefits of an ITWV by my accountant.

After sitting down with my accountant we estimated I would receive a return of $11,960 this financial year.

Rather than wait for the $11,960 to be paid in one lump sum at the end of the financial year, my accountant simply filled out a form, which I passed onto my employer, which enabled this $11,960 to be paid directly to me each pay period.

With my ITWV in place I now receive an additional $230 in my pay each week for the remainder of this financial year.

This additional cash flow can be used to:

  • Improve your lifestyle
  • Repay debt
  • Improve the position of an offset account
  • Save
  • Re-invest

It can also increase your overall financial position in the banks eyes, which may mean they will allow you to borrow more money.

Is it too late to lodge the ITWV this financial year?

Absolutely not.

Your ITWV can be lodged at any point throughout the financial year.

If lodged part way through the year it also takes into account the tax withheld from your salary to the date of the application.

Who should use an ITWV?

Any investor with a negatively geared property and all employees who receive a tax return can use an ITWV.

How does an ITWV benefit property investors?

Investors who gear their property to gain maximum income tax benefits and who are subject to normal withholding tax from their weekly pay can attract substantial tax savings and refunds.

A refund for a single property can be as much as $14,000 per year. Without a weekly tax variation in place, these funds are held by the ATO until the annual tax return is lodged.

Having a lump sum at year-end is nice, but it can put pressure on an investor’s weekly cash flow.

How long will it take to set up an ITWV?

Lodging an ITWV is a fairly straightforward process.

Once an ITWV is processed, the ATO will notify your employer of a “varied” amount of tax to be withheld from your pay each pay period.

The ATO will generally processes most ITWV applications within 10 working days.

What’s the process to set up your own ITWV?

  1.  Download a copy of ITWV form here.
  2. Organise a meeting with your account to fill in the ITWV and estimate your tax return.
  3. Have your accountant send the ITWV form to the ATO.
  4. Have your accountant send the ITWV form to your employer.

You must re-submit an ITWV form each new financial year.

Ben Everingham

About

Ben founded Pumped On Property after building a multi-million dollar property portfolio over a 5 year period. His mission is to show you how to replace your income through property investing so you can do what you love…full time.