Tax Variations on Investment Property
Used to ease your cash flow burdens during the financial year the tax variation varies the amount of tax withheld from your wages by way of estimating your total end of financial year tax position in advance.
In essence the variation is a forecast view of what your tax return is projected to give you as taxable income and inturn tax refund.
The tax on this new estimated taxable income is then calculated by the tax office and a new rate is calculated for you based on this to reduce the tax deducted from your wages.
Therefore, rather than getting a lump sum refund at the end of the year you receive it evenly throughout the financial year.
Minor points to note with regards to variations include:
- A new variation must be lodged every year.
- If you change employment a new variation must be lodged, it does not transfer to your new employment.
- A variation that produces a tax payable of more than $500 in your end of year tax return will result in the following year's variation being rejected.