Key dates for the 2024 tax return process:
Familiarising yourself with the key dates for the 2024 tax return process in New Zealand is crucial to ensure you meet all the necessary deadlines. Just to clarify when we say 2024, this is for the financial year from 1 April 2023 to 31 March 2024. Marking these dates on your calendar will help you stay organised and avoid any last-minute rush (AKA giving yourself more time to do the stuff you actually like). Here are the important dates to remember:
- July 7, 2024: This is the filing deadline for individuals, most small businesses and trusts who file their tax returns without the assistance of a tax agent or Bring On Monday. It's important to submit your return by this date to avoid penalties and interest charges.
- March 31, 2025: If you choose to file your tax return through a tax agent (AKA accountant), this is the filing deadline for most individuals and businesses (yes, 12 months after the financial year ended). However, this isn’t always the case so it’s best to check with your tax agent to confirm their specific deadline.
It's important to note that these dates may vary depending on individual circumstances and extensions granted by the New Zealand Inland Revenue Department (IRD). It's always recommended to stay updated with any changes or extensions that may apply to your specific situation.
Important information for individuals filing tax returns:
As an individual taxpayer, there are things you need to be aware of when filing your tax return for 2024. Understanding these key points will ensure a smooth process and help you maximise your deductions (aka keep more money in the bank). Here's what you need to know:
- Income reporting: All income earned during the tax year, including salary, wages, rental income, and investment income, must be reported accurately. Ensure you have documentation to support your income claims.
- Expenses and deductions: Be aware of the expenses you can claim as deductions. These may include work-related expenses, donation receipts, and certain investment expenses. Keep proper records and receipts to support your deductions.
- KiwiSaver contributions: If you are a member of KiwiSaver, ensure your contributions are correctly reported. KiwiSaver contributions may be eligible for tax credits and other benefits, so it's important to include them in your return.
- Student loans: If you have a student loan, you'll need to provide details of your loan and any repayments you've made during the tax year. Make sure to accurately report this information to avoid any discrepancies.
- Provisional tax: If you had a tax bill over $5,000 last year from income that wasn't taxed throughout the year (like income without PAYE deductions), you'll likely need to pay provisional tax this year. Make sure you understand your provisional tax duties and pay on time to avoid any penalties.
Remember, accuracy is key when filing your tax return as an individual. Keep detailed records, consult the IRD's official guidelines, and consider seeking advice if you're unsure about any aspect of your return.
If you need guidance or have questions, feel free to jump on a call with us - it’s free. We’re here to help you!
Important information for businesses filing tax returns:
If you’re a business owner, filing your tax returns correctly and on time is crucial for maintaining compliance and avoiding penalties. Here are some important pieces of information for businesses filing tax returns in 2024:
- Business structure: Understand the tax obligations associated with your business structure. Sole traders, partnerships, and companies have different reporting requirements and tax rates. Ensure you are aware of your specific obligations.
- Goods and Services Tax (GST): If your business is registered for GST, ensure you report your GST accurately. Familiarise yourself with the GST return filing requirements and deadlines, or chat with us to find out what they are.
- Depreciation and asset purchases: Keep track of your business assets and their depreciation rates. You may be eligible for tax deductions based on the depreciation of assets or the purchase of new assets.
- Provisional tax: Businesses with a previous tax bill of > $5,000 are typically required to pay provisional tax throughout the year. Ensure you understand your provisional tax obligations and meet the payment deadlines to avoid penalties.
It's important to stay updated with any changes in tax laws and regulations that may impact your business. Consider consulting with a tax professional or an accountant to ensure compliance and really maximise your tax benefits.
Changes and updates in the tax return process for 2024:
Each year, the New Zealand tax return process may change. Staying informed about these changes can help you navigate the process better. Here are some key changes and updates for the 2024 tax return process:
- Digital transformation: The IRD is transitioning to a more digital-focused tax system. This means more online services, improved accessibility, and streamlined processes for taxpayers (a win for you and your tax agent).
- Increased focus on compliance: The IRD is placing a huge emphasis on compliance to ensure taxpayers meet their obligations. This includes increased revision of deductions, income reporting, and accuracy of information provided.
- New tax credits and rebates: The government may introduce new tax credits and rebates for specific industries or activities. Stay updated with any potential opportunities to reduce your tax liability or claim additional benefits.
- COVID-19 relief measures: The ongoing impact of the COVID-19 pandemic may result in temporary relief measures or changes to tax laws. Keep an eye out for any specific provisions that may apply to your situation.
It's crucial to stay informed about these changes by regularly checking the IRD's official website, subscribing to their newsletters, or seeking professional advice. Being aware of updates will help you avoid any surprises and ensure you keep the tax man off your back.
Common mistakes to avoid when filing tax returns:
Filing tax returns can be a difficult process. It's important to avoid common mistakes that could lead to penalties or delays. Before they met us, a lot of business owners had made these mistakes in the past and it proved to be costly for their business. Here are some of the most common mistakes to watch out for:
- Mathematical errors: Double-check all calculations and ensure the accuracy of figures. Even a minor mistake can have significant consequences.
- Missing information: Provide all the required information and documentation. Incomplete or missing information can lead to delays or inquiries from the IRD.
- Forgetting about bank interest: Bank interest earned should be reported as income. It's easy to overlook this, especially if you have multiple bank accounts.
- Mixing personal and business expenses: Keep personal and business expenses separate. Mixing them up can make it difficult to accurately calculate deductions and may raise red flags during an audit.
By being aware of these common mistakes, you can take steps to avoid them and ensure a smooth tax return process. That’s one less headache for you and your accountant.
Tips for maximising deductions and minimising tax liabilities:
When filing your tax return, it's important to take advantage of all eligible deductions and credits to minimise your tax liabilities. Here are some tips to help you maximise your deductions:
- Keep thorough records: Maintain organised records of all expenses and income. This will make it easier to identify eligible deductions and provide evidence if required.
- Claim all eligible deductions: Familiarise yourself with the specific deductions you can claim and ensure you include them in your return. This may include work-related expenses, home office deductions, and charitable donations.
- Consider tax-efficient investments: Explore investment options that offer tax benefits, such as KiwiSaver, which provides tax credits and potential long-term growth.
- Engage a tax professional: If you're unsure about your eligibility for certain deductions or credits, consider seeking advice from our tax professionals at Bring On Monday. We can help identify opportunities and ensure you’re not only keeping the tax man happy but also keeping more of your hard-earned money in the bank.
Remember, the goal is to maximise your deductions within the boundaries of the law. Avoid aggressive tax planning or getting involved in activities that may attract unwanted attention from the IRD.
Understanding tax credits and rebates in New Zealand:
Tax credits and rebates can significantly reduce your tax liability and increase your refund. Understanding the various credits and rebates available in New Zealand can help you take advantage of these benefits. These are the key credits and rebates to be aware of:
- Working for Families Tax Credits: This credit is available to eligible families with dependent children. It provides additional financial support based on income and family circumstances and could mean an extra $677 per week to support your household.
- Independent Earner Tax Credit: If you earn between $24,000 - $48,000 (depending on your sources of income) and do not receive certain benefits, you may be eligible for this tax credit. It aims to reduce the tax burden on low to middle-income earners and is valuable for those starting a business and falling within this income range.
- Donations tax credits: Donations made to registered charities and organisations may be eligible for tax credits. You could claim 33.33 cents for every dollar you make in donations. Ensure you keep receipts as proof!
- Research and Development (R&D) tax credits: If you're involved in eligible R&D activities, you may be eligible for a 15% tax credit to offset some of the costs associated with research and development.
Understanding these credits and rebates can help you plan your finances and potentially reduce your overall tax liability. Review the specific eligibility criteria and requirements for each credit or rebate.
Seeking professional help for tax return preparation:
While many individuals and businesses can successfully file their tax returns independently, seeking professional help can provide added peace of mind and ensure accuracy. Plus, it can put a little extra money in the bank depending on your oversights (we’re not throwing shade, but we see this very often with those who file their tax returns independently). If you fall under any of these categories then we advise you to get some professional help:
- Complex tax situations: If your tax situation is complex, such as having multiple sources of income, investments, or self-employment income, consulting a tax professional can help ensure you navigate the process correctly.
- Business owners: Running a business comes with unique tax obligations. A tax professional can provide guidance on business deductions, GST reporting, and other insights specific to your industry.
- Limited time or resources: If you don't have the time or resources to dedicate to preparing your tax return, a tax professional can handle the process efficiently, saving you valuable time and potential stress.
- Peace of mind: Engaging a tax professional can provide peace of mind, knowing that your tax return is being prepared accurately and in compliance with all NZ laws and regulations.
When choosing a tax professional, ensure they have the necessary qualifications and experience. Don’t just go for any Average Joe, pick someone who cares about your business and wants to help you grow. We won’t name names, but we’re accountants and advisors who actually care about your business and your personal goals…whoops, I guess we did name names.
The takeaway?
Understanding the tax return process for 2024 in New Zealand is crucial for individuals and businesses alike. By familiarising yourself with key dates, important information, and potential changes, you can navigate the process confidently and maximise your deductions while minimising your tax liabilities.
Remember to keep thorough records, avoid common mistakes, and consider seeking professional help. By staying informed and proactive, you can ensure a smooth and stress-free tax season - something every Kiwi business owner dreams of at tax time.
Now, go ahead and mark those important dates on your calendar, gather your documents, reach out to us for a chat and earn more from your business!
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