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Tax on Mining Cryptocurrency

This article applies to mining cryptocurrencies. My previous article ‘Are bitcoin and cryptocurrency gains taxable income’ provides a general overview for those purchasing crypto.  The process of mining crypto currencies normally involves using capital assets (specialised computer hardware), to solve algorithms, and cryptocurrency is received as a reward (income). The miner is providing a service (solving an algorithm) and in return being paid in cryptocurrency. The miner will pay tax o...

February 12, 2018

Are bitcoin and cryptocurrency gains taxable income?

With increased investment activity in bitcoin (btc) and cryptocurrency, it’s important to consider any tax consequences that may arise.  Outlined below are the tax consequences for probably the most common situation we see; btc purchased for long term growth.   If you acquire btc for the purpose of disposal, IRD default position is that any gain or loss will be taxable income. This is their default starting position because btc is normally acquire for the dominant purpose of dis...

December 8, 2017

How to pay 0% interest on debt

This is a strategy available to save money on interest, or provide cash (interest free) for investment opportunities. The below strategy outlines exactly how to save up to $4k pa in interest OR earn a $2,600 return by using a balance transfer method. This material has been prepared for informational purposes only, and should not be relied on for tax, legal, investment or accounting advice. You should consult your own tax, legal, investment and accounting advisors before engaging in any transacti...

December 5, 2017

Tax exemption available for gifts to employees

This applies to: Employees of companies only, includes shareholder employees, but not LTC shareholders unless they are paid a PAYE salary (if you’re unsure, ask us) Background information: Normally, if a company provides a benefit to an employee (such as a gift), it is subject to Fringe Benefit Tax (FBT). This means that the value of the benefit provided to the employee is taxed (at the FBT rate of 42 - 49%). A FBT return must be filed and the FBT tax must be paid to the IRD.  However: Th...

December 4, 2017

Government Policy Changes for Small Businesses

Following our recent article about the tax changes of the new government, we’ve outlined some further policy changes that will effect small businesses and property owners:      1. Minimum wage increases to $16.50 from 1 April 2018 This is an increase of $0.75 per hour from the current $15.75 per hour, and Labour plans to increase this further to $20 an hour by 2021. Small businesses will likely be hurt as the minimum wage gradually increases. There is also the potential for cons...

November 3, 2017

New Government - New Taxes

Below we outline some of the tax changes that the new government is likely to phase in. These have not been passed into law yet and will keep you updated when they do. No new tax cuts from 1 April 2018 (that National previously announced). We mentioned in our June 2017 Newsletter about Nationals tax cuts that were being introduced on 1 April 2018. These were going to result in the average New Zealander earning $52k pa to be $20 per week better off. These tax cuts are not likely to happen under t...

November 3, 2017

A New Way to Pay Tax

From April 2018, there is a new provisional tax calculation method called the Accounting Income Method (AIM). AIM allows for businesses with sales of less than $5m to meet their provisional tax obligations as the year progresses and minimise any use of money interest costs. Currently provisional tax is calculated on prior year tax liability and Inland Revenue's (IR) thinking is to make it easier to pay your tax at the same time you earn it, allowing for seasonal changes&...

October 3, 2017

KiwiSaver HomeStart Grant

KiwiSaver HomeStart GrantIt’s not normal that we can expect free handouts from the government; but this is worth looking into. The HomeStart Grant may allow first home buyers a grant of $5,000 -$10,000 to put towards buying an existing home or $10,000 - $20,000 for a new home. There are two HomeStart grants: 1) For purchasing an existing house, the grant is worth $3,000 - $5,000 (based on $1,000 for each year you have been in KiwiSaver (KS)) 2) For purchasing or building a new house, (or purch...

October 3, 2017

Non-Taxable Allowances

An employer may pay a non-taxable allowance (NTA) to an employee to reimburse them for expenses such as the costs of tools (when required as part of their employment agreement) or protective clothing and equipment (for example, steel cap boots, a uniform, or wet-weather gear). Generally, NTA are non-taxable to the employee, but a tax-deductible expense for the employer. Advantages of a NTA are: The employee doesn’t get taxed on the allowance; they receive more cash in the hand each pay and pay...

September 5, 2017

Bright Line Test – What do you need to know?

The bright-line test results in residential property acquired and disposed within two years to be subject to income tax unless an exemption applies. It is additional to the intention test, (if you buy a property with the intention to sell it for a profit, the gain/loss is subject to income tax, regardless of the time frame).  Exemptions that may apply to the bright line test are: The main home exclusion test. This exemption is specific; for example, you can only have one main home (a beach ...

September 5, 2017

Are you preparing your GST returns 6 monthly and have turnover greater than $500k?

If your turnover* has been greater than $500k in the past 12 months, and you are using the 6 monthly GST filing frequency, Inland Revenue (IR) may have exercised it power, and automatically changed your GST filing frequency to 2 monthly from 1 October 2017. If this applies to you, you may have received a letter from IR this past week. IR have the power to change your filing frequency because it is compulsory to use the 2 monthly GST filing frequency if your turnover is greater than $500k in...

July 28, 2017

Make it easier with Xero Payroll!

Over June we set-up a number of clients on Xero Payroll. Below we have shared how Xero Payroll can benefit your business and take the hassle out of your payroll. Compliance with NZ Payroll legislation PAYE, ACC, KiwiSaver and student loan calculations are automatically looked after for you and with the ever-increasing complexity of NZ Payroll legislation, it’s imperative to ensure compliance.  Xero Payroll can assist with this hassle. Integration with the IRD All the reports required by I...

July 7, 2017

How many beers can I drink on the company?

We’ve been asked this question a few times in the last week; so here goes: The short answer: If beers are consumed away from home, or outside of normal working hours and have a connection to continuing on the business (to earn income) they may be 50% deductible for both GST and income tax purposes. The more technical answer: For a business to claim an expense, that expenditure must be used to earn income, or to carry on a business for the purpose to earn income. Unless you are a beer tast...

July 7, 2017

Coaches Corner With Jane Evans

This week I will be competing at the World Masters Games as a rower in eight events over five days, racing everything from the women's single scull to a mixed eights race with the only boat I'm not competing in being a pair, a boat I'm yet to master. I'm a relative newcomer to the sport having taken it up three and a half years ago and the benefits of the sport have been enormous in my life. I'm fitter and stronger than I have ever been and in more than just the physical sense. I will enjoy th...

April 24, 2017

Why you have tax to pay, but may have no cash…

The difference between cash and profit… an example. Just because business profits are reinvested back into the business, does not change that it has been earned in the first place. For example, a business buys stock to sell to its customers for $300. It sells that stock to its customers for $1,000; a profit of $700 is made and tax at 30% is $210. Sales $1000 Cost of Goods Sold $300 Profit $700 Tax on profit (30%) $210 The business has $1k and then buys more stock. The stock purchased is n...

April 21, 2017

The ultimate guide to buying a house with no money… and how to do it!

You may have heard of people buying houses with no money. If you wonder how they do this, have a read of our blog. Below, we outline how the principle of how it is possible to buy a house with no money. While this answers the question of how it is possible, it may or may not necessarily be the right thing to do. All decisions come with potential risks and benefits, and we always recommend you talk with your advisers before making any. To keep things simple, we have not included how potential re...

April 7, 2017

6 Things I learnt from Ironman - Tim Doyle

An Ironman is a 3.8km Swim, 180km Bike Ride and 42.2km Marathon, and the New Zealand Ironman was held on March 4th 2017 in Taupo. I finished in 11 hours 42 minutes and 53 seconds. 1. Consistency is Undervalued In October 2016 I had ran for 90 minutes, and my longest bike ride was 90 mins. Six months later in February with small increases each week I ran for 3 hours non-stop (35km) and had rode for 6 hours (180km) three times. This was achieved through being consistent day in day out with only ...

March 30, 2017

Provisional Tax - What does it mean?

Last week we covered terminal tax, have a quick recap and understand the difference between provisional tax and terminal tax. What is provisional tax?Provisional tax is income tax that is paid in advance to the IRD in instalments during the tax year.Who must pay it?If last year's tax return shows there is more than $2,500 of residual income tax to pay, provisional tax must be paid for the following tax year. This usually happens when income is earned without having tax deducted during the year. ...

March 24, 2017

Terminal Tax Payment due on 7th April - what does it mean?

Why do you have tax to pay on 7th April 2017 Before we get stuck in, business and self- employed people pay provisional tax which is tax paid in advance for the current or next financial year. We will explain this more in next week's blog.What is terminal tax?Terminal tax is the difference between what tax has been paid during the year (as provisional tax, PAYE or withholding tax), and what is actually owed. If too much was paid (eg. as provisional tax) a tax refund is due, but if too little was...

March 17, 2017

8 Tips to Prepare for the End of Financial Year

If you have a 31 March balance date, the end of the financial year is rapidly approaching. Have a read of our top tips below to prepare for the end of financial year. Review the Year, and Plan Ahead Have you achieved what you wanted to? Have you planned and set goals for the next year? While some of these thoughts and discussion may take place once the financial statements are completed to understand the overall profitability and performance of the business, start thinking about these questi...

March 10, 2017

Coaches Corner With Jane Evans

One of my favorite sayings has long been that by Napoleon Hill, "whatever the mind can conceive and believe, the body can achieve" which is often remembered as I'm riding up a memorable hill on my mountain bike. This quote starts the book I am currently reading "The Answer" by Allan and Barbara Pease. Napoleon Hill's saying is supported by medical science and is the secret of the Reticular Activating System (RAS) which is located in the brain stem of the mammalian brain, so most humans have o...

March 2, 2017

Pay Less Tax - Part 2

As accountants, one of our roles is to create tax efficiency for business owners. We do this, by ensuring a business claims all entitled expenses to reduce profit and therefore pays less tax. One expense that may reduce taxable profit is a home office expense claim. Home office expenses are claimable when a business owner uses part of their home for their business. This could be as an office (either an actual office, or a spare bedroom used as an office), or if the actual business is ran from...

February 23, 2017

Pay Less Tax - Part 1

Table 0.1 – How AgBiz Accountants could save you more than $12k in tax (an extra 10%) Entity Profit Tax Tax Savings Individual 120,000 30,520 9,080 Company 120,000 33,600 6,000 Trust 120,000 39,600 - AgBiz Way 120,000 27,580 12,020 ...

February 16, 2017

The MYTH Of Tax Deductions

How often have you heard a business owner say "It's ok, it's a business expense and I can claim it for tax"? Do they really understand that a $70 lunch or dinner may only provide a tax deduction of $6.13? Would you spend $70 to only get $6.13 back? Our take home messages are as follows: The tax deduction on any business expenditure is only a percentage of that expenditure, not the full amount of the expenditure. Don't allow 'tax deductions' to give a misleading incentive to spend money on ...

February 9, 2017

Tax Tips - GST Insights. Part Two

Following on our GST theme, this blog will explain the difference between 'GST basis' and outline the advantages and disadvantages of each. In a nutshell, you can pay GST when you receive the cash from your customer, or when you issue an invoice to your customer. Either option can be beneficial to your business. You have three options if your turnover is under $2 million: payments basis invoice basis hybrid basis Or two options if your turnover is over $2 million: invoice basis hybr...

February 2, 2017 Posts 26-50 of 53 | Page prev next
 

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