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.




129 posts

Master Geek
+1 received by user: 4


# 173785 6-Jun-2015 14:14
Send private message

Anyone have any experience with this? It is my first time filling one out. 

If you are self employed as a part time sole trader as-well as having a fulltime job, how do you calculate income tax for the self employment proportion. Wage/salary income is $14,001 to $48,000 (17.5 cents to the dollar). Net profit from self employment is up to $14,000. Need to include income tax payable from self employment as current liability on IR10 form, as net profit from self employment is up to between $0 and $14,000 is this taxed at (10.5 cents to the dollar)?

Create new topic
2091 posts

Uber Geek
+1 received by user: 849


  # 1318371 6-Jun-2015 17:54
Send private message

Call the IRD - they are usually extremely helpful. I have rung them numerous times in the past with provisional tax queries.

1841 posts

Uber Geek
+1 received by user: 111


  # 1318386 6-Jun-2015 18:18
Send private message

I second the call the ird I would say 7 out of 10 are great and if you do get the occasional d.. thats right no profanity twit just hang up and call again.




Is an English Man living in New Zealand. Not a writer, an Observer he says. Graham is a seasoned 'traveler" with his sometimes arrogant, but honest opinion on life. He loves the Internet!.

 

gnfb on trademe

Email Me


 
 
 
 


2798 posts

Uber Geek
+1 received by user: 161

Trusted

  # 1318401 6-Jun-2015 18:38
Send private message

mb82: Anyone have any experience with this? It is my first time filling one out. 

If you are self employed as a part time sole trader as-well as having a fulltime job, how do you calculate income tax for the self employment proportion. Wage/salary income is $14,001 to $48,000 (17.5 cents to the dollar). Net profit from self employment is up to $14,000. Need to include income tax payable from self employment as current liability on IR10 form, as net profit from self employment is up to between $0 and $14,000 is this taxed at (10.5 cents to the dollar)?


I was heavily involved in the redesign of the IR10 from Accounts Information form to the current Financial Statements Summary. The guide should explain quite well how to calculate any of the key points that need it. You only need to complete it if you are in business, and you have the option of just sending in financial statements if you can't figure it out. 




Solution Architect @Intergen
All comments are my own opinion, and not that of my employer unless explicitly stated.


mdf

2230 posts

Uber Geek
+1 received by user: 686

Trusted
Subscriber

  # 1318402 6-Jun-2015 18:43
Send private message

The IR10 is just the financial statements summary - essentially your P+L and balance statement. It's not even compulsory - you can just use your existing accounts (hopefully you've got some).

Your tax return should actually be the IR3 (if you're self employed, i.e. not using a company). You'll essentially add up all your income (say, salary + self employed income + interest) and all the tax you've already paid (PAYE + provisional tax + withholding tax). You then calculate what tax you should have paid (there's a worksheet in the IR3G or here) and compare that to what you actually paid. If you've overpaid = tax refund, if you've underpaid = tax bill.



129 posts

Master Geek
+1 received by user: 4


  # 1318438 6-Jun-2015 20:30
Send private message

The self employed 'operation' is small, literally consist of some stuff I have sold on trademe here and there. I have records of all income and expenses and have completed the IR3. I am doing it online and up to the IR10 stage, have worked through net profit calculations etc. I just need current liabilities. As I understand it a current liability of my self employed 'activity' (also the only current liability) would be the income tax to pay for any profit during the year. 

On the IR3 form total expenses is greater than total income. 
Calculations on the IR10 form show a net profit. I was told by IRD I am required to fill out an IR10.

Therefore as I understand it I need to know the amount of tax owed to ird from my self employed part time 'activity' and this is a current liability on the IR10. 
If the operation was a official company, simple, company tax is paid on net profit. But how should I work out the current liability of tax to pay for the year in this situation?


1655 posts

Uber Geek
+1 received by user: 246


  # 1318517 7-Jun-2015 06:07
Send private message

Does your ir10 online have asterixes beside the questions? You only have to fill in those as I remember. I just did my first one. Also, if you call them up they will walk you through the whole form. I rang them up and did that to double check I had done it correctly. And yes, you can get a weenie but if you call back you'll hit a more helpful person.

mdf

2230 posts

Uber Geek
+1 received by user: 686

Trusted
Subscriber

  # 1318633 7-Jun-2015 11:50
Send private message

mb82: The self employed 'operation' is small, literally consist of some stuff I have sold on trademe here and there. I have records of all income and expenses and have completed the IR3. I am doing it online and up to the IR10 stage, have worked through net profit calculations etc. I just need current liabilities. As I understand it a current liability of my self employed 'activity' (also the only current liability) would be the income tax to pay for any profit during the year. 

On the IR3 form total expenses is greater than total income. 
Calculations on the IR10 form show a net profit. I was told by IRD I am required to fill out an IR10.

Therefore as I understand it I need to know the amount of tax owed to ird from my self employed part time 'activity' and this is a current liability on the IR10. 
If the operation was a official company, simple, company tax is paid on net profit. But how should I work out the current liability of tax to pay for the year in this situation?



Huh, this is an unusual one.

So, just to check I have it right, suppose we ringfence your "business activities" and pretend that they were carried out by a separate entity (e.g. a company). The business activities turned a small profit.

But when you combine your business activities with your personal situation in the IR3, you don't have any tax to pay. You might have paid too much tax elsewhere, or have sufficient deductible expenses (income protection insurance I guess, since the only other one is paying someone to finish your tax return).

So the net situation is you have no tax to pay. If this is the situation, I'd say your current liabilities are zero. I'd probably put zero on the IR10 and include a note to IRD describing what you've done. As others have said, IRD is typically really helpful and I've never had any trouble with them as long as (1) you've paid the right amount of tax; (2) you've explained what you've done and (3) you've paid the right amount of tax. Did I mention paying the right amount of tax?

It is a little awkward though - I've not come across using an IR10 for an individual. I'm assuming you wouldn't include things like your personal house in your balance sheet, since it has nothing to do with your business. That said, if you made a business mistake as a sole trader and got sued, you could potentially lose your house. Odd.

If you do end up incorporating a company for your small business, it is remarkably easy and cheap in New Zealand.

Create new topic



Switch your broadband provider now - compare prices


Twitter and LinkedIn »



Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:





News »

New Zealand PC Market declines on the back of high channel inventory, IDC reports
Posted 18-Jun-2019 17:35


Air New Zealand uses drones to inspect aircraft
Posted 17-Jun-2019 15:39


TCL Electronics launches its first-ever 8K TV
Posted 17-Jun-2019 15:18


E-scooter share scheme launches in Wellington
Posted 17-Jun-2019 12:34


Anyone can broadcast with Kordia Pop Up TV
Posted 13-Jun-2019 10:51


Volvo and Uber present production vehicle ready for self-driving
Posted 13-Jun-2019 10:47


100,000 customers connected to fibre broadband network through Enable
Posted 13-Jun-2019 10:35


5G uptake even faster than expected
Posted 12-Jun-2019 10:01


Xbox showcases 60 anticipated games
Posted 10-Jun-2019 20:24


Trend Micro Turns Public Hotspots into Secure Networks with WiFi Protection for Mobile Devices
Posted 5-Jun-2019 13:24


Bold UK spinoff for beauty software company Flossie
Posted 2-Jun-2019 14:10


Amazon Introduces Echo Show 5
Posted 1-Jun-2019 15:32


Epson launches new 4K Pro-UHD projector technology
Posted 1-Jun-2019 15:26


Lenovo and Qualcomm unveil first 5G PC called Project Limitless
Posted 28-May-2019 20:23


Intel introduces new 10th Gen Intel Core Processors and Project Athena
Posted 28-May-2019 19:28



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.