NO MORE IR5 TAX RETURNS FOR NON BUSINESS TAXPAYERS-   BUT DO THEY HAVE TO FILE INCOME TAX RETURNS

 

There are no more IR5 tax returns to complete for salary and wage earners.    Now that the PAYE (Pay as You Earn) system has become more accurate, most salary and wages earners and those who receive benefits and pensions are paying the correct amount of tax 

 

GET THESE THINGS RIGHT

Your employer needs to have your IRD Number and your correct tax code.   This will ensure you are taxed at the right code.  If you’re on the wrong code, IRD will become aware of this and write to you to get it changed.
Ensure your bank has your IRD Number to avoid paying too much tax.    If your total income is over $38,000 also make sure they know the rate of tax on interest you want deducted-   you can choose a higher rate to ensure you don’t have an end of year tax bill.

 

SOME SALARY AND WAGE EARNERS WILL NEED A PERSONAL TAX SUMMARY

A Personal Tax Summary shows income and tax deductions for the year.   It also tells you whether you will need to pay tax or if you are due a refund.   Personal Tax Summaries will automatically be sent in June by the IRD to those people who, according to information  held by IRD, will need to “catch up” at the end of the tax year.    You’ll get one if you:

Receive Family Assistance from IRD, or
Receive Family Assistance from Department of Work and Income and earn over $20,000, or
Have a Student Loan and entitled to an interest write off, or
Have used a wrong tax code or use a special tax code.

 

WHAT IF YOU DON’T GET A PERSONAL TAX SUMMARY

You must request a Personal Tax Summary in July if you:

Receive income between $38,000 and $60,000 with more than $200 of interest taxed at 33% or less, or
Receive income of over $60,000 with more than $200 of interest or dividends taxed at less than 39%, or
Received more than $200 in dividends or interest (regardless of whether this was taxed at the right rate) and paid Child Support, or
Received more than $200 in dividends or interest (regardless of whether this was taxed at the right rate), have a Student Loan and earned over the repayment threshold of $14,768.

If you’re not automatically sent a Personal Tax Summary, and none of the above apply, it probably means you’ve paid the right amount of tax, and don’t need a “catch up”.  But if you want to check, you can request a Personal Tax Summary from July onwards.

 

WHAT IF YOU GET A PERSONAL TAX SUMMARY THAT IS INCORRECT

If you wish to make additions or corrections to your Personal Tax Summary, you can call IRD and make the changes over the phone or make them directly on the form and return it to IRD.   IRD will then send you an amended Personal Tax Summary. 

 

HOW DO I KNOW WHAT RATE OF TAX IS BEING DEDUCTED FROM MY INTEREST

Unless you’ve told your bank otherwise, tax on interest will be deducted at 19.5%   (this is the appropriate rate if you earn under $38,000).    If you earn between $38,000 and $60,000, the appropriate rate is 33%.   If you earn over $60,000, the appropriate rate is 39%.   If you don’t provide your IRD Number to your bank you’ll be taxed at 39%. 

 

CAN I CLAIM EXPENSES

Yes, there are certain expenses that can be claimed on a Personal Tax Summary, such as Income Protection Insurance premiums. 

 

WHAT ABOUT CLAIMING THE CHILD REBATE

If you’re a school child who worked for salary and wages and paid tax, you can claim the child rebate by requesting a Personal Tax Summary in July. 

 

SOME PEOPLE WILL STILL GET A TAX PACK

You need to file an IR3 if you:

·         Are self employed or worked on a contract basis

·         Had income from business or rentals

·         Received income that is not taxed

·         Received overseas income 

You will be sent your IR3 tax pack in April.   If you file an IR3 and also receive salary, wages or withholding payments, a Summary of Earnings will be sent to you by IRD on May.   This Summary of Earnings contains your earnings information that IRD have received from your employer/s throughout the year. 

 

YOU CAN STILL CLAIM YOUR REBATES

To claim your rebates, use the IR526 Rebate Claim Form.   If you claimed for donations, childcare or housekeeper rebates the previous year, IRD will automatically send you a Rebate Claim Form.   If you haven’t received a form by the end of April, you can request one by calling IRD INFO Express.   Remember to have your IRD Number handy.

 

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