A question about tax and all things contractor

[The End]

As someone who is a self-employed contractor, how complicated is it to file my taxes?

Assuming I am someone who has never done it before, is it straight forward or should I get an accountant to sort it?

I understand that as a contractor, I am eligible for tax deductions - I've been saving my petrol receipts per the advice of a colleague, however I am not sure if what they said is right - it sounds too good to be true. They mentioned I can get 15% of my fuel bill off my end of year tax dollars owed to IRD, is this true?

:brick:

[pete376403]

You should really talk to an accountant - it's too easy to get tax wrong and when you do IRD is merciless. (Been there, done that, got the bill)
Accounts fees, like virtually all business expenses, are deductible.

[The End]

You should really talk to an accountant - it's too easy to get tax wrong and when you do IRD is merciless. (Been there, done that, got the bill)

Again, someone who has never even spoken to an accountant. Is it likely to be very expensive to get them to go over my income and sort out tax?

[nzspokes]

Again, someone who has never even spoken to an accountant. Is it likely to be very expensive to get them to go over my income and sort out tax?

Its much cheaper than getting caught out and getting a $15,000 bill that they want paid at the end of the week. I know somebody that got caught that way.

Yes accountants cost, as do tax agents. But you can claim that cost back. Get good advice from the start.

[JimO]

Again, someone who has never even spoken to an accountant. Is it likely to be very expensive to get them to go over my income and sort out tax?
mine costs a couple of k a year but they do my gst and rental properties as well

[The End]

Its much cheaper than getting caught out and getting a $15,000 bill that they want paid at the end of the week. I know somebody that got caught that way.

Yes accountants cost, as do tax agents. But you can claim that cost back. Get good advice from the start.

Ha my earnings wouldn't even be near $15,000... I just don't want to go to an accountant and realize I could've done it myself and not had to pay $100/hour for 10 hours work! But hey, I have no idea what the cost/time required will be anyway.

[nzspokes]

Ha my earnings wouldn't even be near $15,000... I just don't want to go to an accountant and realize I could've done it myself and not had to pay $100/hour for 10 hours work! But hey, I have no idea what the cost/time required will be anyway.

Try ringing one up for a quote. Or even cheaper a tax agent. And just because your earnings wont be 15k, dont think it wont turn to shit if you get it wrong. You have to start it out right.

I had an accountant and it was still a struggle to keep up with it.

[Akzle]

whats YOUR time worth, 10 hours for a hundy? I even pay hookers better than that, and yes, for 10 hours. :D

Fuck petrol receipts. Shits for gaylords. (get a fuel account) Did you keep a logbook? Is it work vehicle? FBT?
Youre better using a private vehicle and claiming by kilometer, liek 77c per each yo.
But then cant claim rego fees etc. So just dont pay them and youre ahead.

The lord giveth....
And the IRD taketh away.
(fuck your white jewciety shit)

[The End]

whats YOUR time worth, 10 hours for a hundy? I even pay hookers better than that, and yes, for 10 hours. :D

Fuck petrol receipts. Shits for gaylords. (get a fuel account) Did you keep a logbook? Is it work vehicle? FBT?
Youre better using a private vehicle and claiming by kilometer, liek 77c per each yo.
But then cant claim rego fees etc. So just dont pay them and youre ahead.

The lord giveth....
And the IRD taketh away.
(fuck your white jewciety shit)

I am using my Hornet for commuting to/from work, as well as work errands. However this also gets personal use too.

As I said above, I am completely new to all of this so may have been doing things wrong already, or have the wrong impression of how things work...

[Akzle]

per the advice of a colleague,


it sounds too good to be true. They mentioned I can get 15% of my fuel bill off my end of year tax dollars owed to IRD, is this true?


unless that colleague's last name is NZICA MBAcc, tell him thanks but no.

But essentially yes. You may also claim depreciation at about 30% and shit if its a business asset...

[nzspokes]

or have the wrong impression of how things work...

You do by the sounds. Get advice.

Also, is the Hornet insured as a work vehicle? If not then you are in for a shock if you have a crash. Dont know if it still applys but my car and vans had to have my business name and address on them. Yes you need log books. Receipt books. etc etc.

Oh and save a good chunk of your earnings for the first tax bill, they are normally a good shock to the system. My accountant told me save 30%. That worked out well.

[Akzle]

I am using my Hornet for commuting to/from work, as well as work errands. However this also gets personal use too.

As I said above, I am completely new to all of this so may have been doing things wrong already, or have the wrong impression of how things work...

to/from work is not typically claimable.
Bikes arent eligible for the 77c, i havent heard of anyone having a bike as a business vehicle but its possible.
You need to calculate the % work v home use and may claim the gst back on that %...
Assuming youre gst registered...?

[The End]

You do by the sounds. Get advice.

Also, is the Hornet insured as a work vehicle? If not then you are in for a shock if you have a crash. Dont know if it still applys but my car and vans had to have my business name and address on them. Yes you need log books. Receipt books. etc etc.

Oh and save a good chunk of your earnings for the first tax bill, they are normally a good shock to the system. My accountant told me save 30%. That worked out well.

Ouch....time to find an accountant then. :brick::brick::brick:



to/from work is not typically claimable.
Bikes arent eligible for the 77c, i havent heard of anyone having a bike as a business vehicle but its possible.
You need to calculate the % work v home use and may claim the gst back on that %...
Assuming youre gst registered...?

I am not GST registered as I will be earning <60k (the threshold)

[Akzle]

Ouch....time to find an accountant then. :brick::brick::brick:

I am not GST registered as I will be earning <60k (the threshold)

if you are not gst registered you cannot claim back gst.

Also sounds like ird might deem you an employee, despite your feelings about it.

Time to find an accountant alright.

[R650R]

You could Prob do it yourself if confident with accuracy and filling in forms.
But I happily pay my accountant $250 to do it and he does it well.
I'm always blown away at what losses and depreciation can be claimed.

Btw I keep a income and expenses cash book/ledger reconciled monthly against bank statements and do my own gst returns.

You only need register and charge gst if turnover above 60,000. But it can be beneficial if you expect to later and are buying some high value tools to start up...

[nzspokes]

Ouch....time to find an accountant then. :brick::brick::brick:




I am not GST registered as I will be earning <60k (the threshold)

As I said this can get out of hand fast, get good advice. You pay them a good chunk of coin but I have found it is worth it.

[R650R]

And expect to get raped by ACC at some random stage...

Btw if you use an accountant IRD are slightly more flexible with mistakes and accountant will Prob pick them up for you. And also you won't have to file it all before July 7 like when doing it yourself.

[bogan]

Yeh go with a bean counter, chances are they will save you more than they cost since they know where to put all them beans.

For example, you know about the IETC right? there's the accountant's bill discount in one hit!

I do low volume non GST registered stuff, claim back on household but not petrol, cost about 500 per year; well worth it imo.

[Ocean1]

For the size of your business you should be able to find a CA for a grand per year or less.

When I first approached an accountant I'd been doing my own tax returns, but it was getting complicated enough that I wanted help. I asked him to prepare year end accounts and tax returns and told him I'd be doing a return as usual also.

I said that I'd be paying him out of savings he would make compared to my return, and that with being a professional and all he shouldn't have too much trouble.

Took him 10 minutes to stop laughing, but he agreed. I'm no idiot when it comes to my own money, but he paid his own costs for the next 25 years, until he retired last year.

Oh yeah, and find out about provisional tax and ACC levies before one of them kills your shiny new business. Can't go too far wrong by simply leaving 25% of all income in a separate account.

[Brett]

Yep...definitely agree with the accountant route. I happily pay an accountant these days to manage my personal and various business tax obligations. I have studied accounting in my business degree and used to file my own returns. I would say I have a moderate understanding of accounting in general. I have realised that:

a) I hate working with the taxation system;
b) I am better off spending that time earning extra moolah
c) an accountant usually finds ways to minimise my tax that I hadn't thought of.

Oh...and be aware of the 80% attribution rule...a bugger for contractors in many cases.

[mashman]

As someone who is a self-employed contractor, how complicated is it to file my taxes?

Assuming I am someone who has never done it before, is it straight forward or should I get an accountant to sort it?

I understand that as a contractor, I am eligible for tax deductions - I've been saving my petrol receipts per the advice of a colleague, however I am not sure if what they said is right - it sounds too good to be true. They mentioned I can get 15% of my fuel bill off my end of year tax dollars owed to IRD, is this true?

:brick:

I did it the simple way. Claimed nothing. IR3 form, IR10 (not claiming expenses is a foreign concept to IRD), GST (if registered), ACC (if applicable). If the money is more important, see an accountant.

[Ender EnZed]

As someone who is a self-employed contractor, how complicated is it to file my taxes?

It sounds like you don't have a shit tonne of income to work though so it's not likely to be a difficult job. Ask around (not just on KB) for an accountant who might be appropriate. Arrange a meeting, ask the questions you want answered, pay for his time.

It'll be about $100 for 20 mins but it'll be way better value than paying him to do the whole job, provided you ask the the right questions.

[The End]

It sounds like you don't have a shit tonne of income to work though so it's not likely to be a difficult job. Ask around (not just on KB) for an accountant who might be appropriate. Arrange a meeting, ask the questions you want answered, pay for his time.

It'll be about $100 for 20 mins but it'll be way better value than paying him to do the whole job, provided you ask the the right questions.

Sounds like a good start at least, I'll give it a go.

[Erelyes]

Here's what I'd do.
1) Read the IR375 for starts. Front to back. Rinse and repeat. The second time through, have some post-its to flag things you don't understand.
2) Call them. Ask all your stupid questions, write down what they say. Shit, even set up voice recorder on your mobile and put em on speakerphone or whatever, then come back to that.
3) Then read the IR375 once more. You should be getting it now! 1st October '86, zero-rated vs exempt, etc etc. :sweatdrop

The above applies regardless of whether you plan to earn over 60k.

Then do the exact same with the IR3g and IR10g.

THEN if you have to go see an accountant you will have knocked some time off the bill by omitting the fucktard questions. Plus you can work out whether they are telling you to do dodgy shit (guess what, doesn't matter if your accountant says 'do this' or 'do that'... if they get it wrong, you still have a bill... or, expenses you could have claimed but can't any more)

If you're reading the above and thinking it seems like a lot of work, you shoulda never bothered with the question.

Enjoy and report back

[HenryDorsetCase]

I am using my Hornet for commuting to/from work, as well as work errands. However this also gets personal use too.

As I said above, I am completely new to all of this so may have been doing things wrong already, or have the wrong impression of how things work...

your biggest issue will be whether you are in fact an employee or actually a contractor. In technical terms whether you operate under a contract of service (an employee) or a contract for services: i.e. a bona fide contractor. A Court, asked to decide, will look at the actual relationship, not just the contract: relevant items are the sorts of things you would imagine: who pays what, ACC and tax, and whether you are actually available to other parties to do work for them. Many unscrupulous fucktards will sack employees because they do not want the hassle: having to pay PAYE, provide holiday leave, and sick pay and a proper employment contract etc. So they make the employees redundant and then hire them back as "contractors" and dont have to stress about that shit - its all on the contractor to sort out.

When you "negotiated" your hourly rate, did you factor in stuff like that, or is it an effective pay cut because if you dont work you dont get paid, and there is zero security.

My advice to you is talk to an accountant. Preferably one with some experience in the industry you are in. They will tell you if your charge out rate is reasonable, what sort of shit you have to budget for blahdeblah. The wonderful worlf of fucking provisional tax awaits you by the way.

At the very least you should be getting your "employer" to deduct RWT from payments they make to you: there are industry specific rates I think: but it will make filing your EOFY stuff easier if you have paid tax already.

You might also get into the fabulous and exciting world of GST. Bet you can't wait.

A little bit of money spent now will reap dividends in the future.

[Ocean1]

your biggest issue will be whether you are in fact an employee or actually a contractor.

First thing IRD will look at is "Does 80% of your revenue come from one source?".


I use several part time contractors, paying them appropriately. If I had to actually do the employer thing I'd simply shut the door, can't be fucked with the hassle.

[AndyR1]

First I would do a free seminar for GST and RIT at the RID branch of you choice - check out their website for this. This is the basic you need and you got a lot of very valuable information out of these 2 seminars!

Then you can decide depending on your business and volume of invoices you need to handle if it's worth to use an accountant.

There is even an Excel based system for your GST/RIT available where you can have a look at under http://www.xceltax.co.nz/

I'm doing all my GST/RIT tax stuff alone based on my own Excel sheets/records. It's up to you how good you can develop your own process to handle these things on your own but doing a GST return for instance doesn't even take me more than 5min if you are continuously doing your books.

[The End]

First I would do a free seminar for GST and RIT at the RID branch of you choice - check out their website for this. This is the basic you need and you got a lot of very valuable information out of these 2 seminars!

Then you can decide depending on your business and volume of invoices you need to handle if it's worth to use an accountant.

There is even an Excel based system for your GST/RIT available where you can have a look at under http://www.xceltax.co.nz/

I'm doing all my GST/RIT tax stuff alone based on my own Excel sheets/records. It's up to you how good you can develop your own process to handle these things on your own but doing a GST return for instance doesn't even take me more than 5min if you are continuously doing your books.

As far as invoicing goes, I am working for one person, as a contractor, invoicing them weekly. So come March there would be around 35 invoices. I've contacted a few accountants and am yet to hear back. They'll probably laugh me away anyway!:laugh:

[AndyR1]

As far as invoicing goes, I am working for one person, as a contractor, invoicing them weekly. So come March there would be around 35 invoices. I've contacted a few accountants and am yet to hear back. They'll probably laugh me away anyway!:laugh:

Yes I asked one too and he told me to do it on my own...do these IRD seminars and create some nice Excels ala CashBook etc. - go from there. I have 12 invoices per year and perhaps 100 for expenses incl. depreciation - you can do that:niceone:

[Akzle]

As far as invoicing goes, I am working for one person, as a contractor, invoicing them weekly. So come March there would be around 35 invoices. I've contacted a few accountants and am yet to hear back. They'll probably laugh me away anyway!:laugh:

you're employed. sorry to say. you can't claim shit, except sick leave and holidays and shit.

[The End]

you're employed. sorry to say. you can't claim shit, except sick leave and holidays and shit.

I'm not. The contract I signed specifically stated I am a contractor, and I agreed to it.

I invoice my employer who pays me gross.

[Mom]

As someone who is a self-employed contractor, how complicated is it to file my taxes?

Assuming I am someone who has never done it before, is it straight forward or should I get an accountant to sort it?

I understand that as a contractor, I am eligible for tax deductions - I've been saving my petrol receipts per the advice of a colleague, however I am not sure if what they said is right - it sounds too good to be true. They mentioned I can get 15% of my fuel bill off my end of year tax dollars owed to IRD, is this true?

:brick:

If you are using your vehicle for business you must keep a log book for 3 months to determine the % of business use. If you don't you can only claim 25% of the costs. Go see an accountant mate. Most offer you an hour of free consultation, go pick some qualified brains.

[Akzle]

I'm not. The contract I signed specifically stated I am a contractor, and I agreed to it.

I invoice my employer who pays me gross.

as i think has already been said, if more than 80% of your income comes from one source, the IRD will deem the relationship as employer-ee regardless of your contract. you might want to wise up your employer and all.

now, more than ever, go and get an accountant before you find out just how far the IRD can get their arm up your ass.


If you are using your vehicle for business you must keep a log book for 3 months to determine the % of business use. If you don't you can only claim 25% of the costs. Go see an accountant mate. Most offer you an hour of free consultation, go pick some qualified brains.

that is one method, there are several other accepted ways about it.

[Akzle]

of course, you could try the biblical- freeman road
"a workman is worthy of his hire"
and operate under a contract for hire, and tell the government and IRD to fuck right off with their shit.
i will :not: if you achieve this.

[Oscar]

As someone who is a self-employed contractor, how complicated is it to file my taxes?

Assuming I am someone who has never done it before, is it straight forward or should I get an accountant to sort it?

I understand that as a contractor, I am eligible for tax deductions - I've been saving my petrol receipts per the advice of a colleague, however I am not sure if what they said is right - it sounds too good to be true. They mentioned I can get 15% of my fuel bill off my end of year tax dollars owed to IRD, is this true?

:brick:

Have a look at Xero: https://www.xero.com/nz/accounting-software/

My bank account talks to Xero, it assembles the reports and such and then I get my accountant to do the heavy lifting.
If I really wanted too, I could probably do it without the Accountant, but it's always good to have a safety net.

[Oscar]

as i think has already been said, if more than 80% of your income comes from one source, the IRD will deem the relationship as employer-ee regardless of your contract. you might want to wise up your employer and all.

now, more than ever, go and get an accountant before you find out just how far the IRD can get their arm up your ass.



that is one method, there are several other accepted ways about it.

I see that you talk crap on every subject.

[Oscar]

First thing IRD will look at is "Does 80% of your revenue come from one source?".


I use several part time contractors, paying them appropriately. If I had to actually do the employer thing I'd simply shut the door, can't be fucked with the hassle.

That 80% rule is only one factor.
I'm a contractor and I get 99% of my income from one source.
It's more to do with what isn't paid than what is.

[Akzle]

I see that you talk crap on every subject.


That 80% rule is only one factor.
I'm a contractor and I get 99% of my income from one source.
It's more to do with what isn't paid than what is.

well please, enlighten us about this jewry...

[Ocean1]

That 80% rule is only one factor.
I'm a contractor and I get 99% of my income from one source.
It's more to do with what isn't paid than what is.

As did I a couple of years ago. Well, 85%. Big project.

And you're right, there's other considerations, but that 80% is the flag that attracts IRD attention. And believe it or not they can difficult to reason with. :Pokey:

[Oscar]

well please, enlighten us about this jewry...

Go and see an accountant, dickwad.

[Oscar]

As did I a couple of years ago. Well, 85%. Big project.

And you're right, there's other considerations, but that 80% is the flag that attracts IRD attention. And believe it or not they can difficult to reason with. :Pokey:

My situation doesn't attract attention because my contract is so different to the salaried equivalant.
No car, no park, no holiday pay, no perks, just a monthly invoice.

[Akzle]

Go and see an accountant, dickwad.

i did. we had sex.

i'm really interested in what you have to say...

[EmBe]

I think you'll be fine sorting it out by yourself if you read everything fully. As a contractor you'll have to fill in an IR3, like previous people have mentioned put aside tax as you go and be prepared for an ACC bill. You say you think your total contractor income will only be about $15k ? If you're working as an employee for other businesses keep ya payslip details handy as you'll likely have to include any PAYE and ACC payments when filling your tax form as a contractor.
As for claiming fuel and expenses i'm not sure you'll have much joy there - it's best to try and include that into the contractor fee that you're charging or include tool/transport/consumables as an extra on your invoices.
Good thing you're willing to ask questions cos the IRD are never willing to go easy on you if you get it wrong :angry: cocks
you can do it!! :woohoo:

[avgas]

i did. we had sex.
i'm really interested in what you have to say...
What was his name?
(Talk about being fucked by the tax man)

[Akzle]

What was his name?
(Talk about being fucked by the tax man)

:laugh::laugh:

...i dont even have a good comeback. I havent had coffee yet. Gaddamn.

[mashman]

As did I a couple of years ago. Well, 85%. Big project.

And you're right, there's other considerations, but that 80% is the flag that attracts IRD attention. And believe it or not they can difficult to reason with. :Pokey:

There is no reason. There is only legislation.

[avgas]

:laugh::laugh:

...i dont even have a good cumback.
If you stand up it will will leak out. :killingme

[Akzle]

av:2
ax:0

oh dear!

[HenryDorsetCase]

I'm not. The contract I signed specifically stated I am a contractor, and I agreed to it.

I invoice my employer who pays me gross.

I think the leading case in the area is still Bryson v Three Foot Six Limited Basically it depends.

If, however, you were injured or sick then it might be useful to try and skew the relationship one way or another

http://courtsofnz.govt.nz/cases/james-bryson-v-three-foot-six-limited/