Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.


theitman

130 posts

Master Geek


#196662 8-Jun-2016 11:42
Send private message

Hi Everyone,

 

So i work in I.T. and in my spare time i repair broken/damaged laptops and sell them on trademe.

 

Does anyone know what the IRD will specifically look for? I only have a real trace of items sold/purchased off trademe/success fees/parts purchased etc. I have purchased off facebook and sold on facebook but have no way to prove it.

 

Does anyone also know what tax rate i will getting charged at?

 

help

 

Thanks!


Create new topic

mdf

mdf
2675 posts

Uber Geek

Trusted
Subscriber

  #1567854 8-Jun-2016 11:49
Send private message

You'll be charged at your marginal tax rate.

 

i.e. IRD charges tax on your total income. If you make $100K per year, you will pay $23,920 tax. This is regardless of whether you earned $100K from a salary, wages, self employment or a mix (e.g. $60K salary + $40K profit on the side = the same tax as $100K salary).

 

You work this out at the end of the year. Unless you are doing it via a company (IR4), you include this in your personal tax return (IR3).

 

If you have a residual income tax of more than $2,500 (basically a tax bill of more than $2,500) you also need to pay provisional tax. Which is kind of a PITA PAYE/pay-tax-as-you-go for companies.

 

If your turnover is more than $60K, you also need to register for GST. There are some advantages in voluntarily registering even if you are short of that (claiming back GST you pay). You need to weigh that up against the hassle of keeping records and doing GST returns.

 

IRD's website has some pretty helpful information here.


knoydart
893 posts

Ultimate Geek

Trusted
Subscriber

  #1567866 8-Jun-2016 12:18
Send private message

Provisional tax maybe going in the next year or so, so long term that's a good thing. Short term however, you still have to stump up the cash.


 
 
 
 


theitman

130 posts

Master Geek


  #1567887 8-Jun-2016 12:45
Send private message

Anyone here work for the ird haha

 

Say if i bought a broken laptop with the intention to fix then on sell for $500, fix and sell for $1000 am i taxed on the $1000 or the $500 profit i make?

 

 


mdf

mdf
2675 posts

Uber Geek

Trusted
Subscriber

  #1567893 8-Jun-2016 12:55
Send private message

theitman:

 

Anyone here work for the ird haha

 

Say if i bought a broken laptop with the intention to fix then on sell for $500, fix and sell for $1000 am i taxed on the $1000 or the $500 profit i make?

 

 

 

 

For income tax, just the profit. You basically add up your income and deduct the (allowable) expenses. The broken laptop counts as costs of goods sold, which is an expense.

 

GST is on the whole amount, but you can get an input credit for any GST you paid. If you're buying it from a non-GST registered person (which I guess you are) you won't get the input credit though. Unless there's some special rule I don't know about (which there might be).


timmmay
16502 posts

Uber Geek

Trusted
Subscriber

  #1567894 8-Jun-2016 12:55
Send private message

You're taxed on profit, which is income less expenses. Tax is based on total income earned, regardless of how it's earned.

 

If you don't declare income and pay tax you can be liable to fines and penalties. IRD probably keep a good eye on Trademe.


theitman

130 posts

Master Geek


#1567896 8-Jun-2016 13:00
Send private message

timmmay:

 

You're taxed on profit, which is income less expenses. Tax is based on total income earned, regardless of how it's earned.

 

If you don't declare income and pay tax you can be liable to fines and penalties. IRD probably keep a good eye on Trademe.

 

 


Yup I know they keep an eye on trademe, just trying to get this sorted so i don't get any fines etc.

 

Just going around in circles atm trying to get it sorted. I have purchased off facebook and messages have been deleted so have no way to prove what i paid etc

 

Starting to freak out a bit


knoydart
893 posts

Ultimate Geek

Trusted
Subscriber

  #1567897 8-Jun-2016 13:01
Send private message

timmmay:

 

IRD probably keep a good eye on Trademe.

 

 

Yes they do


 
 
 
 


networkn
23435 posts

Uber Geek

Trusted
Lifetime subscriber

  #1567899 8-Jun-2016 13:05
Send private message

theitman:

 

Anyone here work for the ird haha

 

Say if i bought a broken laptop with the intention to fix then on sell for $500, fix and sell for $1000 am i taxed on the $1000 or the $500 profit i make?

 

 

 

 

 

 

Call the IRD. They have people who understand this entirely. They aren't boogeyman out to get you, and unlike the bad old days, are keen to help. 

 

They will help you fully understand your responsibilities. 

 

 


richms
23648 posts

Uber Geek

Trusted
Subscriber

  #1567909 8-Jun-2016 13:19
Send private message

mdf:

 

For income tax, just the profit. You basically add up your income and deduct the (allowable) expenses. The broken laptop counts as costs of goods sold, which is an expense.

 

GST is on the whole amount, but you can get an input credit for any GST you paid. If you're buying it from a non-GST registered person (which I guess you are) you won't get the input credit though. Unless there's some special rule I don't know about (which there might be).

 

 

There is the ability to claim GST on second hand goods, but when it was explained to me it sounded like far too much work on the odd piece of obsolete gear off trademe. Might be worth it if that is your sole source of parts tho.





Richard rich.ms

Create new topic





News »

Nanoleaf enhances lighting line with launch of Triangles and Mini Triangles
Posted 17-Oct-2020 20:18


Synology unveils DS1621+ 
Posted 17-Oct-2020 20:12


Ingram Micro introduces FootfallCam to New Zealand channel
Posted 17-Oct-2020 20:06


Dropbox adopts Virtual First working policy
Posted 17-Oct-2020 19:47


OPPO announces Reno4 Series 5G line-up in NZ
Posted 16-Oct-2020 08:52


Microsoft Highway to a Hundred expands to Asia Pacific
Posted 14-Oct-2020 09:34


Spark turns on 5G in Auckland
Posted 14-Oct-2020 09:29


AMD Launches AMD Ryzen 5000 Series Desktop Processors
Posted 9-Oct-2020 10:13


Teletrac Navman launches integrated multi-camera solution for transport and logistics industry
Posted 8-Oct-2020 10:57


Farmside hits 10,000 RBI customers
Posted 7-Oct-2020 15:32


NordVPN starts deploying colocated servers
Posted 7-Oct-2020 09:00


Google introduces Nest Wifi routers in New Zealand
Posted 7-Oct-2020 05:00


Orcon to bundle Google Nest Wifi router with new accounts
Posted 7-Oct-2020 05:00


Epay and Centrapay partner to create digital gift cards
Posted 2-Oct-2020 17:34


Inseego launches 5G MiFi M2000 mobile hotspot
Posted 2-Oct-2020 14:53









Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.


Support Geekzone »

Our community of supporters help make Geekzone possible. Click the button below to join them.

Support Geezone on PressPatron



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.