Introduction
When it comes to managing our financial affairs, most of us are happy to do it ourselves. We like the idea that we know how much we have and what we should be paying in taxes. However, when it comes to tax management, things can get complicated pretty quickly. This is especially true if you are a contractor or freelancer who does not receive regular paychecks but instead receives a single lump sum at the year’s end. In this case, having someone who knows what they are doing can help you avoid problems down the road such as penalties for late filing or underpayment of taxes.
It can be tough to get your head around how much you should be paying in tax.
You also need to know how much tax you will have to pay and what deductions you can make.
To get this information, it is best to speak with a financial adviser so that they can help you understand your current situation, along with providing any advice on how best to manage any issues at hand.
The financial advisers can help you with filing taxes to ensure that you pay only what you owe. You will have to file your taxes every year. The process of filing can be complicated, and many people do not understand how it works. When you get a financial adviser Auckland, they can help you with filing taxes so that you are only paying what you owe. They will also walk you through the entire process and make sure that everything is filed correctly. This means that they will make sure that no mistakes are made on your behalf, which could lead to penalties or fines from the government later on down the line.
However, if you work on a contract, then it is up to you to ensure that the right amount of tax is deducted and paid. If you are unsure what your obligations are as a contractor, speak with a financial adviser who will be able to guide you through the process and make sure that everything is filed correctly.
Contractors must pay their taxes on time and in full because failure to do so can result in penalties from Inland Revenue.
The result can either be good or bad, depending on how well the pre-tax calculations are done.
To avoid bad tax calculations, you must do the following:
- Check if your income is subject to tax withholding. If it is not, then you will have to pay taxes on the sum of all your income sources before any refunds are applied.
- Ensure that your pre-tax calculations are accurate. This means that when computing how much money needs to be withheld from each paycheck, only include the amount withheld for investment purposes and other deductions (such as housing expenses) under this computation. Do not include any other deductions like medical insurance or retirement savings accounts in these computations as they could result in a negative calculation.
