How to pay less tax this year!
Do you expect to earn $14,000 or less over the coming year? You may qualify for a new low rate of tax.
On 1 April 2010, a new tax rate of 12.5% will come into effect. It's available to people who have secondary earnings or income from investments.
Secondary earnings
Do you work for two or more employers? You'll qualify for the new 12.5% tax rate on your secondary (smaller) sources of income if your total income from all sources will be $14,000 or less for the year 1 April 2010 - 31 March 2011.
The lowest rate of secondary tax is currently 21%.
If you'd like to choose the new rate, please fill out a Tax code declaration (IR 330) form showing the "SB" tax code. Give the form to your employer before 1 April so you'll get the tax benefits for the full year.
Your employer may have copies of the IR 330 at work, but if not, you can download one at www.ird.govt.nz.
Income from investments
Do you earn interest from a bank account or income from a PIE investment? You'll qualify for a RWT or PIE rate of 12.5% if your total income from all sources will be $14,000 or less for the year 1 April 2010 - 31 March 2011.
The lowest RWT/PIE rate is currently 19.5%.
If you'd like to choose the new rate, please contact your bank or financial institution. Do it before 1 April so you'll receive the lower tax rate for the full year.
If you have any concerns, please contact your tax advisor before making any decisions.
Questions?
Inland Revenue's website has more information about the new tax rates here.