Who needs to file an income tax return ?

The simple answer is that if you have only received income from salary/wages, interest, dividends, and/or taxable Māori authority distributions then you probably don’t have to file an income tax return. Of course, taxation isn’t always simple. There are a bunch of other questions to also answer.

For example, if the above situation applies to you and your interest has been already taxed (by RWT) at a higher rate than your overall tax rate based on your total annual income, then you could be entitled to a refund. The opposite could apply in that you may have interest of more than $200 taxed at a lower rate than your income tax rate for the year which means you have been under taxed and may need to submit a tax return.

For people only on salaries and wages you have the option of checking to see if a refund is due. This is done by either calculating it yourself such as using the IRD online calculators, or using a tax agent. Using the IRD website is free, but a tax agent may charge a fee for this service which you should enquire about first. If you have a refund due then you need to order a PTS (Personal Tax Summary) from the IRD (or the tax agent will do this on your behalf). If you have tax to pay then generally you don’t have to file a return (unless you know there was income that was not properly taxed because of your error).

As for everybody else, you need to see if you have any of the following circumstances. If you do then you will need to file (an) income tax return(s).

• self-employed income

• over $200 of schedular payments (formerly withholding payments)

• income derived overseas

• over $200 of interest and dividends derived overseas that have had tax deducted

• overseas interest and dividends that have had no tax deducted

• rental income

• estate, trust, partnership or look-through company (LTC) income

• royalties

• cash jobs or payments "under the table"

• income from illegal enterprises

• income without PAYE deducted, such as shareholder-employee salary or a claim received under a taxable loss of earnings policy.

• have losses to claim or brought forward from the previous year

• have excess imputation credits brought forward from the previous year

• left or arrived in New Zealand part-way through the year

• are filing a return for a deceased person to the date of death if there is a requirement to file a return for this income year

• were declared bankrupt part-way through the year

• changed your balance date part-way through the year.

Individuals with any of the above will need to file an IR3. An ordinary company files an IR4. A partnership or a Look Through Company (LTC) files an IR7. A trust or estate files an IR6. These are the most common tax returns but there are a few others too. If you are unsure about anything above, you should obtain professional advice.

 

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.