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Tax debt = interest free loan

Discussion in 'Accounting & Tax' started by legallyblonde, 1st Jul, 2016.

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  1. legallyblonde

    legallyblonde Well-Known Member

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    Welcome to July.

    Once I complete my taxes I will end up with almost $5k owing to the ATO as a result of having three jobs and two positive cashflow properties.

    I keep repeatedly saying ...interest free loan...

    I am resisting the urge to have more tax withheld because I love having the extra cash in my offset.

    Job 1 is about 50% of my income
    Job 2 is about 40% of my income and I am not claiming the tax free thresehold
    Job 3 and IPs make up the last 10% and have no tax withheld.

    I will di my taxes as late as possible...is there anything I should be aware of with regards to tax debts?
    I believe yoy cannot borrow money until the debt is repayed?

    If my job situation doesn't change I will be in the same boat next year
     
    Jennifer Duke likes this.
  2. EN710

    EN710 Well-Known Member

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    Why not get an accountant? You can delay it until early next year.

    Not aware of this? Hubby didn't pay his until early this year and we got a loan without issue
     
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  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It won't be a debt until the ATO issues a notice of assessment.
     
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    But....You haven't considered that the ATO will also invite you into the world of PAYG instalments soon after you lodge so that you pay 25% of the expected FUTURE shortfall every quarter. There will be a catch up period too. So you may be asked to pay $10K not $5k. (ie 2016 tax $5k and 2017 instalment of $5k) Maybe not all at once either but in close proximity.

    Using a tax agent can defer that problem by a further 6 months...possibly
     
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  5. wogitalia

    wogitalia Well-Known Member

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    Debts of 5k probably wont accrue any interest even after lodgement with the ATO because of how their system works, though you will get harassed by them once it's lodged if you haven't paid it.

    As has been said, seeing a tax agent could buy you until May/June 2017 to lodge and pay the amount.
     
    legallyblonde likes this.
  6. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    And when a lender asks if you owe any money you wold have to disclose (or lie).
     
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  7. legallyblonde

    legallyblonde Well-Known Member

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    Is this something that I could avoid by stopping the tax free threshold that I am claiming at Job 1? This situation would be negotiable?

    I would pay the debt as soon as the bill was due (as I have the funds available). Whatever the standard window is.

    Very handy to know for future reference. But will probably not affect me in the near future.
     
  8. Jennifer Duke

    Jennifer Duke Well-Known Member

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    THIS. Enjoyed very much having an extra $10k in the offset for a year. Now has to be paid quarterly. Damn.
     
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  9. legallyblonde

    legallyblonde Well-Known Member

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    Update: Completed my taxes late last month. My bill arrived today (approx $4.2k as expected) and it is due later in the month.

    If they were going to ask for quarterly additional tax payments to be made when would I expect to hear about this? This is my first debt =)
     
  10. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    The benefit to this is pretty significant - I currently have approx 18 months worth of tax sitting in my offset. Loving it. Just got to be careful not to accidentally spend it on a house.
     
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  11. Rob G

    Rob G Well-Known Member

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    Why is no tax withheld on "Job 3" ?
     
  12. legallyblonde

    legallyblonde Well-Known Member

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    Work a three hour shift vary rarely ☺
     
  13. Bran

    Bran Well-Known Member

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    Yeah, I'm dreading this...

    Haven't paid tax for over a year. Baulking on my return. Highest tax bracket. Yikes...
     
  14. Bran

    Bran Well-Known Member

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    Ha ha. This!
    I'm carrying on uninterrupted. I figure I will worry about it when I get the bill.
     
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