The tax rules are reasonably clear but many New Zealanders still pay more than they need to and miss out on thousands of dollars in refunds.
Here are some simple tips:
- Make sure you claim for any donations, especially school donations.
- If you have income replacement insurance, make sure you claim the premiums, as there is a deduction for these as well.
- If you are paying for financial planning advice, you can claim for this.
- Make sure you have the right tax rate on your KiwiSaver. If you haven’t and you are paying too much, the IRD will not refund you, but if you’re not paying enough, they will charge you.
- Make sure you are paying at least $1043 every year into KiwiSaver. This means you are getting a $521 tax credit. If you are not in KiwiSaver, on contribution holiday or paying below this level, you are missing out on a tax refund.
- Check the ‘working for families’ entitlement. This is a great scheme but it can have a bite to it, if your income goes up. Make sure you get it if you are entitled, but don’t collect it if you aren’t. The IRD will come looking for you.
We’re financial advisers, not accountants, but we can help get the information you need to make sure you are claiming what is rightfully yours. For specialist advice we suggest you talk to a qualified accountant.
John Barber