If you’re a New Zealand resident, it’s essential to know how to work out your tax returns – especially as the deadline for filing them looms ever closer. In most cases, you’ll be able to use an online tax return calculator to determine how much you owe, but it’s still a good idea to understand the process. Here’s an outline of what you need to do.
Gather Your Documents
When it comes to the papers, you’ll need to complete your tax return, and the IRD (Inland Revenue Department) will send you a notice of assessment after they’ve processed your information. This document tells you how much money you earned in the previous financial year and any deductions or expenses that can be claimed. You’ll need this paperwork when you sit down to fill out your return.
In some cases, you may not receive a notice of assessment. This could be because the IRD doesn’t have your correct contact details or because you didn’t earn enough money to require one. If this is the case, you can still complete a tax return using an online calculator or contact the IRD directly.
In the modern world, more and more people are doing their shopping and banking online. This means that you might not have many physical documents to gather. However, you must ensure you have records of your online transactions. If you’re unsure how to do this, don’t worry – most banks and financial institutions will be able to provide you with electronic copies of your records.
Understand the Bright Line Test
The bright line test is a set of rules that determine whether or not a property sale is subject to capital gains tax. The test applies to any property sold within two years of being bought, with a few exceptions. If you’re planning on selling a property shortly, it’s crucial to understand how the bright line test works.
This will help you avoid any unexpected tax bills. Nowadays, online sites can help you calculate whether or not you’ll owe capital gains tax on a sale, or you can speak to a qualified accountant for advice. When you visit opespartners.co.nz, look at your marginal tax rates information to understand what you will pay. Besides, you can check information about self-employed tax returns and other essential tips. Understand that you will also need to pay attention to your turnover tax if you are self-employed.
Fill Out The Return
This can be done online or by downloading a paper copy from the IRD website. If you’re unsure which option to choose, keep in mind that the online system is usually quicker and easier to use.
When filling out the return, you’ll need to provide information about your income, deductions, and expenses. If you’re unsure how to answer specific questions, plenty of help is available on the IRD website.
If you’re filing a joint return with your spouse or partner, you’ll need to include their information. Once you’ve completed the return, you can submit it online or send it in by post.
Get Help If You Need It
If you’re struggling to complete your tax return, don’t hesitate to seek help. The IRD website has a lot of helpful information, or you can speak to a qualified accountant for advice. Remember, getting help is better than making a mistake on your return.
However, when finding an expert, make sure you go for a registered tax agent, as they are the only ones allowed to file electronically on your behalf. Also, check that your chosen accountant has experience dealing with self-employed tax returns, as this can be a complex area.
Paying Your Tax Bill
Once you’ve filed your return and calculated how much tax you owe, it’s time to pay the bill. This can be done online, post, or in person at a local IRD office. If you’re paying by post, make sure you allow enough time for your payment to reach the IRD before the due date.
If you can’t afford to pay your tax bill in full, don’t panic. The IRD offers a range of payment options to spread the cost over time. However, remember that you’ll still need to pay interest on any unpaid tax.
Without timely tax returns and tax payments, you may face some penalties. These can include late payment fees, as well as interest charges. In severe cases, you may even be prosecuted. If you’re having trouble paying your tax bill, the best thing to do is contact the IRD and explain your situation. They may be able to offer you a payment plan or some other form of assistance.
Completing your tax return doesn’t have to be a nightmare. You can get it done quickly and easily with preparation and help from the IRD website. Ensure you allow enough time to gather all the necessary paperwork and calculate your tax bill. If you’re ever unsure about anything, don’t hesitate to seek help from a qualified accountant.