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How to do a Tax Return — DIY style

How to do a Tax Return — DIY style

As you begin to hear the constant radio adverts to claim your 2018 tax refund, you may find that the easy option is to sign up to one of the many tax refund companies that have flooded the market, pay them a fee and then cross your fingers and hope you have a refund coming your way.

With a bit of education, I can assure you that you don’t need those companies and that you have the ability to do your tax return all by yourself via ird.govt.nz

This blog will focus on Personal Tax Summary (PTS): For the majority of people in NZ, they will have their earnings from a Salary or Wage. In this situation your Tax Return should be relatively straightforward as your tax has already been deducted from your employer.

However, if you have earned income other than salary and wages, such as the following list, then you will need to file an IR3. An IR3 allows you to claim expenses in relation to your income earnt (wee note, this is usually business related, so if you’ve sold a few clothing items on Trade Me, you wouldn't need to declare this unless your in the business of selling clothing on Trade Me. I will touch base on this type of return over the next week or two).

  • Rental income
  • Self-employed or business income
  • Overseas income
  • Income from cash jobs or "under the table" payments
  • Income from an illegal enterprise
  • Royalties
  • More than $200 that includes schedular payments (formerly withholding payments)
  • Estate, trust or partnership income
  • Over $200 of overseas interest and dividends that did have tax deducted
  • Overseas interest and dividends that didn't have tax deducted
  • Income without PAYE deducted, such as shareholder-employee salary or a claim received under a taxable loss of earnings policy
  • Allocated income from a portfolio investment entity that was taxed at a zero rate or a rate lower than your correct rate

Step 1:

Set yourself up with a MY IRD login — Can be found via this link

Step 2:

Ensure that you do not have a tax agent (Tax Refund Company) acting on your behalf. To find this out, log into your MY IRD > go to My Details (top right tab) > Select the Tax Agent Tab. If you do have someone acting on your behalf, request for them to be removed — Via my IR or calling 0800 775 247 (IRD) or by using the secure mail option.

Step 3:

Check under MY DETAILS and ensure that the bank accounts listed are your bank account. If you do have a Tax Agent acting on your behalf or have previously, you may find that they have entered their account in this section so that they get your refund before you.

If you’re a salary and wage earner, let's confirm your Personal Tax Summary

Step 1:

Log into your MY IR, and select the REQUEST PTS tab, shown below on the right.

Step 1.PNG

Step 2:

Select your Tax Year. The most recent being 1 April 2017 - 31 March 2018 but if you haven’t done a tax return over the past five years, you’re in luck and you can still do these. Then select CALCULATE.

Step 2.PNG

Step 3:

From here there are 6 YES/NO questions for you, which should be pretty straight forward. Quick Tip: Interim payments for your student loan are not payments that you make automatically from your pay.

Step 4:

Now you should see your earnings for the tax year from your salary and wage! This is what your employer has filed with the IRD. A thing to note, is that all your income details for the year may not appear till mid-May which IRD are processing your employer’s information. In this case, if your income does seem different, I would wait until May to confirm your PTS (but still go through the steps so you get a rough indication of your tax refund)

There are also another lot of Yes/No questions and keep an eye out for the Independent Tax Earner Credit — Which is a tax credit available if your annual income is between $24,000 and $48,000. If you are eligible, it will ask you how many months you were working over the year and therefore how much of the tax credit you are eligible for.

Step 5:

You then have a few more Yes/No questions, and in particular one that asks if you have any EXPENSES to claim for the year. This is where you can claim an amount if you had someone help you with your tax return such as an Accountant, book keeper or a tax agent — if you have questions about what you can and can’t claim have a look at the link here

Step 5.PNG

Step 6:

Select the GO TO RESULTS button which will show your your Tax Refund or Tax to Pay.  If it’s looking healthy, you can hit the REQUEST PTS button, which will send your return off to IRD. Please note it does take IRD until the beginning of June to process all refunds!

If you do need to file an IR3, then hold tight, your return is going to be a little more complicated!

Got questions? Feel free to contact me via email at paperandsweat@gmail.com — Tax Returns are the definition of a foreign language!

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