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How to get tax back for Christmas

A lot of people aren’t aware that if your tax-deductible expenditures are higher than your employer’s withheld tax allows for, you don’t always have to wait until July to do something about it. If you have known, concrete income and expenditures for the year – for example, property rental income, mortgage interest payments, and rate payments – then you can probably lodge a tax variation form and have the Australian Tax Office (ATO) modify the amount of income tax withheld by your employer.

What is a tax variation?

A tax variation allows a taxpayer to ensure that their tax return at the end of the financial year is as accurate as possible, avoiding large credits or debits. A variation may be lodged partway through the financial year.

Who can apply for a tax variation?

You can apply for a tax variation if you meet all of the following criteria:

  • Have lodged all required tax returns and activity statements, or notifications that these were not required, with the ATO to date.
  • If you had an approved withholding variation last financial year, you did not receive a debit assessment.
  • No outstanding tax debt owing to the Australian government.
  • No outstanding debts under Acts administered by the ATO.

How long does the ATO take to process a variation?

If you lodge a variation form online, the ATO will generally require around 28 days to process your claim. If you lodge using a paper form, it will require about 56 days.

Should I submit a variation myself?

We don’t recommend that people submit their own variations without having the figures checked by a licensed accountant. If you get it wrong, you could not only end up with a large tax bill in July – you could also attract penalties from the ATO if it deems that you were negligent in your claim.

More information

ATO information on PAYG withholding variation