Pay as You Go Income Tax Instalments (PAYG)
Taxpayers with fluctuating income may want to vary upcoming individual income tax instalments for March and/or June quarters under the PAYG system. As economic growth is tipped to slow over the coming year your income may be reduced, hence a downwards adjustment could be appropriate.
Of course, these instalments are pre-payments of your expected 2013/2014 income tax liability and generally based on the previous year’s taxable income as disclosed in your taxation return.
Any downwards adjustment should be discussed with your advisor, as penalties apply if the variation results in you paying an amount that is less than 85% of the actual tax payable on your business and investment income for the financial year.
It is essential that any variations contemplated are made prior to the lodgement and payment date of the instalment. The Australian Taxation Office will not accept any variations post that date!