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!

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