An IR3 Form is a very important document that you must fill out if you’ve made extra money apart from your regular salary, wages, interest, dividends or taxable Māori authority distributions.
Other incomes must be over $200 and can include the following:
- self-employed income
- schedular payments (formerly known as withholding payments)
- income derived overseas including interest and dividends
- rental income
- estate, trust, or partnership income
- cash jobs (known as “under the table” or “cashies”)
- any other income without PAYE deducted, such as shareholder-employee salaries
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There are other reasons that require you to fill out an IR3 Form. For instance, if you have any losses to claim from the previous year, you have to file an IR3. If you’ve recently moved to New Zealand, or left us, part way through the year, you need to fill one out too. Not to mention declaring bankruptcy and filing a return for a deceased relative. All of these situations require IR3 Forms! And you really can’t get out of filing one because there are penalties to be had for those who are required to file but don’t. It’s also very important to fill out an IR3 correctly, with all of the required details, and on time.
Mytax.co.nz specialises in filing IR3 returns so get in touch.
Now the IR3 form itself is daunting, but even more intimidating is some of the terminology it uses. Let’s take a look at the most important parts of the IR3 Form so that you can fill it out correctly:
Questions 1-5 are looking for your personal information, such as your legal name and date of birth. Surely you know these things! If you’ve changed your name or address, be sure to note the corrections here so that the IRD can contact you if they need to.
Questions 6-7 refer to your business or company. If you don’t have one, you can skip this part. The same goes for questions 18-21 – these are all business, company and partnership related.
You want to get Question 8 right, because it’s your bank account number and you want to get paid!
Question 9 is vital as it refers to Working For Families Tax Credits and your Student Loan. And if you have a student loan, this is the part of the form that will help the IRD determine how much money to deduct from your income as repayment.
Question 10 refers to non-residents who might have been away from New Zealand for a total of 325 days in any 12-month period and who don’t have a permanent place of residence here. If you’re unsure about your status you can contact the IRD or let us do it for you.
If you weren’t in New Zealand and were a non-resident for a full year, but you still received income from New Zealand, you might have to fill out an IR3NR return instead. If you were lucky enough to become a New Zealand tax resident during the year 1 April 2015 to 31 March 2016 and you’ve chosen not to be treated as a transitional resident, you’ve got to complete an IR3 Form declaring your global income from the date you became a New Zealand tax resident.
Question 11 is gloriously straightforward. If you received a family tax credit from Work and Income, a regular salary, wages or any schedular payments, you’ve got to fill out the boxes you see here. But don’t worry, all of this info is on your Summary of earnings (SOE), which the IRD will send you by the end of May along with your IR3 Form.
Question 12 refers to those dastardly schedular payments. These are payments made to people who are employed on a contractual, casual, temporary or seasonal basis. If this sounds like you, you’ll receive a summary of earnings (SOE) letting you know what schedular payments you’ve received and how much tax was deducted. If these payments tally over $200, an IR3 is required!
If you’ve been great at saving your earnings and you’ve made some sweet interest, it’s time to declare it at Question 13. Interest can come from any of the following places:
- your bank
- your credit union
- a partnership or trust
- Inland Revenue
- building or investment societies
- any security deposits
- personal loans you’ve lent out to family or friends
Question 14 needs filling out if you’re killing it in stocks and receiving dividends. Dividends are company profits that are shared among shareholders. If you don’t have any shares, you can skip this beauty.
Question 15 is important to people of Māori heritage. Maori Authority Distributions are made to a member of a registered Maori Authority. So, if you received a distribution or credit you’ll also receive a Distribution Statement for the applicable tax year.
Question 16 is all about estates and trusts. If you happen to have received any family estate or trust income this where you declare.
If you’ve been a jet setting tycoon over the last year, you’re going to have to declare any income you made during your travels here at Question 17. This kind of overseas income can also refer to any foreign superannuation schemes you might be receiving. You’ve got to convert your overseas income and tax credits into Kiwi dollars by using the rate tables found on the IRD website or through contacting the overseas section of a New Zealand bank and asking for the exchange rate for the exact day you received your overseas income.
If you’ve been receiving rent money or lodger payments, you declare it at Question 22.
Question 23 is for those of us who are self-employed and are fortunate enough to take a salary! This is different from schedular income though, so if you’re a contractor, you declare that income at Question 12.
If you’ve received any other income, now’s the time to declare it at Question 24. Other incomes can include the private sale of land or buildings, but most importantly, payments that have been made to you “under the table” or cash in hand. Bartering and tips also fall under this umbrella, so it’s best to list any sources you’re getting this extra income from.
Question 26 allows you to claim expenses and deductions. If you’ve paid any of these particular expenses you can claim them here! These can include such expenses as fees paid to My Tax for completing your tax return to premiums on income protection insurance.
Say hello to the Independent earner tax credit (IETC) at Question 30. This one’s a goody.
The IETC is a tax credit for Kiwis whose annual income is between $24,000 and $48,000. If you’re a NZ tax resident, didn’t receive any Working For Families tax credits, NZ super, Work and Income benefits or pension, then you’ve got this.
At the end of the IR3 Form you’re required to calculate your own tax. Yet another daunting task that we can take off your hands. Just get in touch with us or fill out our easy application form to get started.