Do you have to file a tax return? What about previous years? Is tax always a bad thing? Have you checked for refunds since 2015? Is it worth cheking?

 



Most of us get our tax back automatically thanks to the new system where IRD calculates the tax you have paid versus the tax you should have paid.  This system came in in 2019, however, if you had tax owed to you prior to that it may still be sitting there waiting for you.

Normally when you are on wages, you are taxed at the correct rate of tax and so there should be no need to "catch up" at the end of the financial year.

Provided all is as it should be, you remained in the same employment, your family circumstances didn't change and you are not in a business of your own.  These, and so many other things can have an effect on whether the calculation is correct or not.

For example, if you were in a high paying job, say $150,000 gross then the tax would be deducted (incl ACC) at $42,414.  However if you were only in that role for 6 months and earned $75,000 the tax that would be deducted is $16,713(including ACC), but you would have paid half of the amount due for the $150,000 or $22,207.  So the difference between the $22,207 and $16,713 is your refund of $5,494.  This situation happens more often than you think, as people change jobs, or leave to start a family etc. 

The same situation applies if you start a new role 6 months into the financial year, you will be taxed as though you were earning that amount for the full 12 months.

One of these situations may have occurred to you since 2014 and if so, when you log into MyIR at www.ird.govt.nz you need to click on "income tax" then "returns and transactions".  Next to each financial year end, there should be an amount of $0.00, if not then you need to click on where it says an amount or where it talks about your PTS or Personal Tax Summary.  Click and go through the process of your PTS, before you press submit, check if you are entitled to a refund or tax to pay.  If it is tax to pay, DO NOT submit it, just leave it there.  If it is tax to be refunded then press submit and the money will be in your bank account very quickly.  

Many people still have these outstanding, please check it to make sure you have nothing owing to you.  We need every little bit when it comes to money in the bank.  

I hope some of you find some windfalls from this blog, feel free to share, comment, like or follow my blog and to questions, it is great to think critically about this.  Have a wonderful day.

Comments

  1. Anonymous7 June 2023 at 09:21

    Thanks Sarah, Great blog, Its crazy how much this can happen if changing jobs etc, I remember manually going through the website to file a return & being surprised with how much I got back at times. Now that it is automated it is nice that everyone can get a refund if they have one without applying.

    ReplyDelete
    Replies
    1. Grannie Sarah's Solutions8 June 2023 at 21:32

      Thanks so much, yes it is automatic now but people can also apply for the past ten years, so it is not too late if you had changed jobs and think there might be a refund there for previous years, good luck!

      Delete

Post a Comment

Granny Sarah's most popular Solutions

The concept of contents insurance. Replacement of things from insurance. How much to insure things for?

Image
It is interesting when we get insurance, any form of insurance, we are advised by the person who is selling it to us.  Let's think about that for a moment......... Lots of things in life are like that, salespeople are supposedly the experts in their field.   In the 70s my dad was a mechanic, he also sold cars, the cars he serviced, so he was the expert, he knew about cars intimately!  Still does!  Things have changed dramatically, we now have specialist car sales people, that's all they do, they know a minimal amount about the actual mechanics of the vehicle and their only job is to sell it to you.   Insurance sales people are the same as that.  At the end of the day, their job is to sell a product that "suits" you.  They are in the business of selling and that is how they earn their keep, we have to respect them for that.   I was sold very high contents insurance,  I had it for many years.  I did a lot of research in this...
Read more

Am I losing money on my Kiwisaver? Is it a good investment? What is really happening? How can I find out what my real return is when comparing it to other investments?

Image
  Is Kiwisaver "worth it"?  One of the most common questions I get asked.   The simple answer is absolutely!! My Kiwisaver figures are above, the one on the left is the amount I have contributed, the top line is what I have personally put into it.  The numbers on the right are what my Kiwisaver balance is today. I have been in Kiwisaver since day one so a long time now, but the deductions from my salary over the years has been $42,603, my Kiwisaver net balance is $114,368. Basically, the return is ridiculously high, I challenge anyone to get a this type of return on investment anywhere.  When people say, "I have lost $5,000 on my Kiwisaver, it is ripping me off"  I challenge them to look at these two screenshots for themselves. The one on the left is from the Inland Revenue Department and anyone can get it in about five minutes by logging in, or longer if you have to call them, unfortunately the wait time can be horrendous.  I feel for the people ...
Read more

The joy of interacting with people "in person" is it overrated? What happens when we bump into someone face to face? Should we talk to strangers?

Image
  The importance of physical interaction with people, family, friends, strangers, just people as opposed to online!! Due to COVID and all sorts of other events, like cyclones and difficulties getting around on our roads, there have been a lot of cancellations and times where we haven't been able to interact with those we love.  Communities have been missing out on vital physical social interaction.  Sure, everyone is on social media and in contact through their phones and the internet, but not in the same room. It has been a tough last week in my local community.  I have had people in tears in my classes, over a very special young person taken way too soon.   As a community we gave him the most beautiful, sad, incredible send off, his friends and family were amazing.  Of a town of around 4000 people there were about 2000 people in attendance.  What a beautiful community, we needed to get together to grieve.  It made me think of the importance...
Read more