Inland Revenue requires anyone earning extra income that isn’t salary, wages, dividends, interest, and/or taxable Maori authority distributions to file an IR3 tax return. IR3 tax returns are completed at the end of the tax year to confirm the amount of personal income and the amount of tax to be paid.
Some examples of extra income that needs an IR3 to be filed for, are:
- Self employed or business income, including contractors, people paying schedular tax (withholding payments), directors of companies or sole traders
- People who have rental properties
- Poeple who have earned overseas Income
- People who have earned overseas interest and dividends that didn't have tax deducted
- People who have earned income from cash jobs
- People who have earned over $200 of overseas interest and dividends that did have tax deducted
You'll also need to file an IR3 return if you:
- Have losses to claim or brought forward from the previous year
- Left or arrived in New Zealand part-way through the year
- Are filing a return for a deceased person to the date of death (if there is a requirement to file a return for the income year)
- Were declared bankrupt part-way through the year
- Received allocated income from a portfolio investment entity that was taxed at a rate lower than your correct rate
These are just some examples, if you require some clarity or would like to check if you should file an IR3 tax return you can contact IRD or can call us at WE Accounting.
What are the benefits of filing an IR3 tax return?
As an IR3 Tax filer you are able to claim your business expenses. Some of these could be petrol, business clothing, business tools, and some entertainment and home office expenses, to name a few. Filing an IR3 will also help to see if you are entitled to a tax refund or if you have tax to pay.
What happens if you are supposed to file an IR3 tax return, but don’t?
If you are required to file an IR3 tax return then you must do so by the 7th July, otherwise you can be given late penalty fees and be charged interest from the IRD. You may also be missing out on a tax refund.
How can WE Accounting help?
First of all, if you are unsure if you need to file an IR3 tax return, then you can call us at WE Accounting on (09) 378 9207 and we can check for you. At WE Accounting we can process all IR3 tax returns and make sure your business structure is set up correctly to help with your tax requirements.
The team at WE Accounting have English and Samoan speaking staff to cater to different language speaking clients. We are also a Chartered Accounting firm and have the expertise and knowledge to help our clients with their tax needs. Using WE Accounting would also mean we would do all of the liaising with IRD on your behalf and we will see if you are entitled to a tax refund.
Need help processing your IR3?
We can be contacted by phone on 09 378 9207 or you can email us below
PLEASE NOTE: The information contained in this document is for information purposes only and should not be relied upon as a substitute for professional advice. For further information and advice please contact WE Accounting & Business Services Ltd Chartered Accountants.