Topic: Income Tax - Kiwitax - Small Business & Rental Property Accountants

What is Depreciation & How Does it Work?

As a business owner or property investor you’re entitled to make a tax claim for depreciation – but what exactly is depreciation? It’s best described as the devaluation of your assets over a number of years and different assets have different life spans so that’s why the depreciation rates differ. An asset is defined as an item costing over $500 which will be used on an o... More

Topics: Income Tax Claimable Expenses Depreciation Accounting Business

Posted 23/07/2017

New Tax Codes for Contractors

From 1 April 2017, if you are hiring any contractors that are required to have withholding tax deducted, or are a contractor yourself the IRD have issued a new form to be filled in from April 2017 onwards. Contractors providing labour hire services, such as Recruitment Agency or IT Contractors, are required to have these deductions made no matter the structure their business activity is under. Pr... More

Topics: Income Tax Business Tax Compliance Withholding Tax Inland Revenue Contractors Links Schedular Payments Starting Business

Posted 31/03/2017

What Does "Loss Carried Forward" Mean?

When a business or rental property makes a loss for the year (so expenses are higher than income) it results in a loss for income tax purposes. For Sole Traders, Partnerships or LTC Companies this loss can be offset against wages or other personal income for the year. It reduces the taxable income which reduces the amount of tax needed to pay. If a loss is made in a Trust or an Ordinary Company it... More

Topics: Income Tax Accounting

Posted 18/05/2015

Have a Family Member Living in Your Rental Property?

If you have a family member or associated party living in your rental property, there are different tax rules that apply to this situation. Based on the arrangement you have with them, the following rules apply. If you're not charging them any rent - you don't need to declare this rental property in your income tax return and you can't claim any costs. If you're charging them less than mar... More

Topics: Income Tax Rental Property Tax Returns LTC Non-Resident

Posted 12/01/2015

Current Income Tax Rates

We often get asked what the actual tax rates are for individuals and business. As at October 2014 these rates apply: Company Tax Rate 28% Trust Tax Rate 33% Individual Tax Rates $0-$14,000 10.5% $14,001-$48,000 17.5% $48,001-$70,000 30% $70,001 + 33% For basic income tax estimations try the Income Tax Calculator or contact us if you have any questions. More

Topics: Income Tax Tax Returns PAYE

Posted 15/10/2014

Income Protection Insurance Deductibility

Many people have Income Protection insurance policies - these are claimable in your personal income tax return (whether you are in business or in paid employment) as long as any proceeds upon making a claim are treated as taxable income. Usually your insurance company will send out a letter after the end of each financial year detailing the amount you've paid on your premiums and the portion that... More

Topics: Income Tax Claimable Expenses Record Keeping Tax Returns

Posted 8/10/2014

What is a Dividend?

A dividend is an allocation of profits from a company to its shareholders. In small businesses it usually works like this - a company has made a profit for the year and paid income tax on that profit at the company tax rate of the time (currently 28%). The shareholders have not yet had the use of this money. When the shareholders decide they'd like to withdraw this money from the company a divid... More

Topics: Income Tax Shareholders Tax Returns Terminology Company

Posted 25/09/2014 – Updated 22/12/2014

What is Provisional Tax?

When you first go into business you don't actually have to pay any income tax to IRD for quite some time (unless you are going to be earning over $180K in profit for your first year - then different rules apply). So say your first financial year will end at the 31 March 2015 - then your financial accounts and returns are prepared and any income tax payable for that year is due to Inland Revenue b... More

Topics: Income Tax Terminology Provisional Tax Starting Business

Posted 23/09/2014 – Updated 30/09/2014

July 7 Deadline

A quick reminder if you / your business has an accountant / tax agent the 7 July deadline most likely isn’t for you, an extension of time to 31 March applies. The main reason the extension wouldn't apply is if tax returns weren't filed with IRD in time for last financial year. This means for Kiwitax clients, don't panic! (Unless you didn't have your income tax returns in to IRD by the due d... More

Topics: Income Tax Tax Returns Due Dates

Posted 2/07/2014

Calling Trade Me "In Trade" Badge Traders

With the new Trade Me "in trade" badge coming into effect for sellers on 17 June 2014 - it will become very easy for IRD to identify which traders are "in business". These people are required by IRD to keep proper records and prepare business accounts and file income tax and possibly GST returns. If unsure about this or not already set up we highly recommend discussing how best to go forward with... More

Topics: Income Tax Accounting Business Tax Compliance

Posted 12/06/2014

Thinking of Buying a Holiday Home?

The tax rules around holiday homes have changed significantly making many formerly available tax deductions unavailable. If considering buying a property to be available for short term hire e.g. a holiday home which is rented out to the public for short periods and you also want to make use of the property - please contact us first for advice! If buying such a property for tax relief it's now not... More

Topics: Income Tax Rental Property Record Keeping

Posted 15/04/2014

New Income Tax Calculator

We've just uploaded a new Income Tax calculator. Simply enter your estimated income / sales and expenses / costs per year, month or week and the calculator will give your profit and the tax in each bracket plus the total estimated income tax for the year. Please note it doesn't include the extra expense claims we make for you, Working For Families and so on - just a basic estimate to give an idea ... More

Topics: Income Tax Links Freebies

Posted 25/02/2014

Paying Children Wages? Heads Up!

If you employ children in your business there's been some significant changes with regard to their taxation. Currently our understanding is as follows... From 1 April 2013 if your business employs school children you will need to do their wages through your payroll and deduct PAYE / income tax. This will apply to all businesses and school children employees. School children who do cash jobs li... More

Topics: Income Tax Business Employing Salary & Wages Guides

Posted 15/10/2012

Business Tax Types & What they Mean

Here is a brief description of the types of tax that you are likely to come across in business: GST - Goods and Services Tax - this is chargeable by businesses whose annual sales turnover is over $60,000 per year. It means that the seller needs to add +15% onto their sale price - this 15% is then returned to Inland Revenue on a monthly, 2 monthly or 6 monthly basis via GST returns (less the GST t... More

Topics: Income Tax PAYE FBT Provisional Tax Guides

Posted 24/03/2011

First Year in Business Do I Pay Income Tax?

A common myth people often share is that "you don't have to pay income tax for the first year in business". The fact is any profit earned will require income tax to be paid to Inland Revenue, it's more a case of when you have to pay. In the first year of trading you don't make any income tax payments to IRD. After the first financial year's trading the business financial accounts are prepared whic... More

Topics: Income Tax Business Guides

Posted 11/03/2011