Many people do not have to file with the Inland Revenue Department if their income is already taxed, but it is still worth checking as there are many times when expenses can be claimed.
Donations to approved charitable organisations mean you can claim a 33% refund. This is well worth having, even if only to donate it again. You can file your receipts as you receive them or save them up and file all at once at the end of the tax year.
Donations can only be claimed up to the amount of the tax paid each year and can be credited against tax to pay, or a refund in your bank account. If you are someone who needs to file an IR3, IRD hold your tax credit until you’ve filed your IR3 tax return and then they can confirm your income.
If you do not use myIR or do not do your filing online, you will need to complete a “Tax credit claim form – IR526”. Attach all your donation receipts and post to IRD, P O Box 39090, Wellington Mail Centre 5045.
The Government passed the Taxation Income Tax Rate and Other Amendments) Bill on 3 December 2020 and these are coming into effect during this year. There are four main issues which may affect you.
The new tax rate of 39% on income over $180,000 will be in effect from 1 April 2021. As well as the rate change, the Bill contains a number of consequential changes, including two new secondary tax codes SA and SA SL for any with Student Loans. IRD have issued stern warnings for anyone considering moving their income in order to avoid this higher tax rate.
Increased disclosure requirements will be required for trusts from the 2021-22 income year onwards. Contact us for more details.
An Increased Minimum Family Tax Credit (MFTC) threshold for the 2020-21 tax year is available to low-income families with children.
Clarification on the ability for Inland Revenue to require information for the purposes of providing quality policy advice: the information gathering powers outlined in the Taxation (Income Tax Rate and Other Amendments) Bill are not new. The Bill simply clarifies the existing measures that the Commissioner of Inland Revenue can require information to be provided to assist with the development of tax policy.
The four issues highlighted above have been released by IRD to clarify the position for taxpayers this year.
Many of you will still have matters to be clarified for the change in the claiming of interest on investment properties. Please feel free to contact us so we can help you resolve this and feel assured that we will file your correct returns.