Yahoo Finance Answering your tax questions
Can I file tax returns for previous years? Will the IRD penalise me?
You can file old year tax returns. This may be of benefit if you are due a refund or have losses to carry forward to future years. There is a restriction to seven years ago, which is soon to be limited to four years. Late filing penalties would apply if you were required to file the returns. Late payment penalties would apply if you had tax to pay and didn’t pay when the tax was due.
I have a small shareholding, the dividends are reinvested. They have been franked at 70%, do I need to pay anymore tax? Or can I claim some back?
Only certain tax credits paid by overseas companies can be used to offset income tax in NZ. Franking credits on Australian dividends are not claimable in NZ. Look out for Australian companies that include NZ imputation credits and/or resident withholding taxes on dividends which are claimable. If the income you have does not have enough (or no) tax credits you may have more tax to pay as calculated by filing your income tax return.
I was made redundant with approximately 21 weeks of pay owing which I was paid weekly until the end of the 21 weeks. I changed my tax code to S for this income. I started another job which was taxed M. I was advised I would probably receive a refund at the end of the year however I don’t have one. Is this correct?
The only true way of seeing if you have a tax refund due is to do the calculations. It is always possible that your employer has made a mistake in calculating the taxes, even though you may have given the correct information such as your tax code to your employer.
If my wife and I have a term investment and ‘my share’ of the interest from the investment, i.e. 50%, puts me into the 33% tax bracket, can I allocate more of the interest to her or even ‘all’ as her liability will still be only 23%?
Joint accounts are always assumed to be equally divided between the owners for interest and tax credits or dividends etc. The only way this might be different is if there is a written agreement for a different split. Beware that this agreement would need (a) good reason(s) to be unequal, otherwise tax avoidance could be claimed. It is even harder for related persons such as husband and wife to have an uneven split due to relationship law. If you have ‘separate property’ such as an inheritance, you need to keep it separate in an account in your own name only. This is the best way to have interest properly allocated to individuals.
Do I need to pay tax on properties I sold last financial year and this?
Tax on property depends on your original intentions when buying the property, or whether you are a property trader. There are special rules also for developers and builders. Land tax can be complex and can also cover other taxes such as GST. I suggest getting some professional advice.
I am registered for WFFTC. Can I claim IETC even though I don’t get WFFTC?
Entitlement to Working for Families Tax Credits (WfFTC) will be the trigger to cease claiming the Independent Earner Tax Credit (IETC). Registration alone will not be an issue.
I started being a sole trader in December 2013, using my own money from the sale of my house. What do I need to do for the 2014 tax year, if anything?
You should obtain professional advice as to what you need to do when running a business in terms of tax compliance administration.
Tax on rental properties
Repairs and Maintenance versus Capital Improvements. This is an article in itself which I will do soon.
If my IRD number is not registered on the IRD site can I still file for a refund?
You don’t have to be registered for the IRD website in order to file a tax return. You can still fill out forms manually or use a tax agent to do this.
What is the difference between a tax ‘return’ and a tax ‘refund’?
A “Tax Return” is the information of your income and tax credits sent to IRD. A “Tax Refund” is an amount you will receive if you have overpaid tax after filing a tax return.
Do my husband and I have to do tax returns? We are both on the pension and our home is in a family trust (we are the directors).
A trust has Trustees and a company has Directors. Refer to the earlier article “Who Needs To File An Income Tax Return”.
How are child support payments calculated at each weekly pay when the weekly pay is different? Does this make it essential that anyone paying child support puts in a tax return?
The only way that child support payments can properly be calculated is by submitting a tax return. Beware that many taxes such as WfFTC include many other definitions of income of which taxable income may only be part of. The biggest problem with people paying child support who are in business or have varied employment income is understanding the timing of their income to the payments of the tax deductions.
Disclaimer:
Any views the writer has expressed are his own and not necessarily those of Accountants On Elliott LP. The information supplied has been written in general terms only. This information should not be relied upon specifically without also obtaining appropriate professional advice after detailed examination of your particular situation.
