Yahoo Finance Answers to your tax questions
Re: Claiming home office expenses. If you don't own your own home, but have a designated area as a home office can you still claim utility expenses such as electricity, and contents pnsurance?
If you don’t own your home then you are able to claim part of the rent. If you own your home and have a mortgage that was used to buy this house then you are able to claim part of the interest paid (not the principal). Beware though that IRD policy is that the home office area must be solely for this purpose, so you wouldn’t be able to use your dining area for example. Generally a home office claim would include the proportion of office to the entire house for expenses such as rates, rent/interest, electricity, house insurance. There are other costs that may be claimed depending on the business and how the office works with that industry. For example contents insurance would probably not be claimed unless you could identify the office fittings and equipment cost easily within your insurance payment.
Why does it take so long to get your tax back?
There have been some processing delays by IRD this year and my understanding is that they have now caught up. Between April and July each year the IRD systems are stretched due to the volume of taxpayers who must file their tax returns by 7 July. I liken it to a mechanic who has a large number of clients whose WOFs are due in this period. Also the fact is that most simple tax returns involve wages and salaries of which many employers don’t have to submit the March data until 20 April. This means that by the time this data is processed there is probably only two months to process the multitudes of tax returns. One way of spreading out this workload for both the IRD and also tax agents is the extension of time system. This system allows tax agents to file tax returns more evenly throughout the year without penalty as long as prearranged targets are met.
I’m a NZ citizen, but not a tax resident. I do not live in NZ but would like to buy a house. I don’t want this to make me a tax resident. Could I have a non NZ Company buy and own the house? Could I be the only shareholder, Director, or would they need to be other non NZ residents?
As mentioned in previous weeks, tax residency can be complex. You would need to check your current residency status. What would the house be used for – a rental investment maybe? There are a number of questions that would need to be asked to determine your particular circumstance and you should seek professional advice.
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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.
