ATO (tax office) payments by credit card

[Dyslexic traveler]

Now if they excepted Amex and the limit was 500k I would be set, and they would get there tax/ blood money on time. I do not mind paying tax but do I have to keep Mr Rudd in the style to which he has become accustom, I feel like he is trying to muscle in on my ex wife gig.

 

[serfty]

They do accept Amex, at a fee of 1¼%.

Your $500K payment can be made in 10 x $50K transactions ...

 

[Dyslexic traveler]

They do! great that's made me feel good let's see that's 7k in fee's that's 75000 points costing me 11c a point is that a barging?? I will have to looking to that thanks for the heads up

 

[Flying Fox]

They do! great that's made me feel good let's see that's 7k in fee's that's 75000 points costing me 11c a point is that a barging?? I will have to looking to that thanks for the heads up

Just a correction on your maths.

$6250 in fees for at least 500,000 points (at 1 point/$) or 750,000 points (at 1.5 points/$). Thus $0.0125/point or $0.0083/point.

Thus, even better news for you!

And I promise not to tell your ex-wife

 

[cove]

$500k on ULTIMATE AMEX gives 759,375 points and costs $6250
$500k on Platinum KRIS Westpac gives 503,250 points but only costs $3250
$500k on Westpac Kris Amex gives 759,375 and costs $6250
These payments fees on BAS are tax deductible
Westpac allow you to go into credit balance so you dont need a huge credit limit whereas Ultimate dont allow credit balances but you can reload the card by phone every 3 days.

 

[Dyslexic traveler]

Math was never my strong point and that's why god made accountants the Black card will let me pay for it without having to top it up but thanks all

 

[burmans]

$500k on ULTIMATE AMEX gives 759,375 points and costs $6250
$500k on Platinum KRIS Westpac gives 503,250 points but only costs $3250
$500k on Westpac Kris Amex gives 759,375 and costs $6250
These payments fees on BAS are tax deductible
Westpac allow you to go into credit balance so you dont need a huge credit limit whereas Ultimate dont allow credit balances but you can reload the card by phone every 3 days.

While probably not true for a $500K payment for smaller payments an allowance should be made for the fact that this is a CC payment so you have longer to pay, i.e. pay the bill on day 1 of new payment cycle, you have 45 days before you actually have to pay the money to the CC company, in which time put your money in a high interest business saver account (currently paying ~6%). By my calculations this almost reduces the cost to $0 so points are near enough to free (on the Visa calculations anyway).

 

[albatross710]

an allowance should be made for the fact that this is a CC payment so you have longer to pay, i.e. pay the bill on day 1 of new payment cycle, you have 45 days before you actually have to pay the money to the CC company, in which time put your money in a high interest business saver account (currently paying ~6%).

In practice I find enough other bills to put on the KF card that I'm clearing the balance during the 45 days.

 

[cove]

I hope this chat thread has got a few more Australians looking forward to their next tax bills so they can travel the world in style at the lowest possible net cost

 

[drron]

What's even better is paying your quarterly BAS by Amex.Collecting the points.Then getting everything refunded!

 

[albatross710]

What's even better is paying your quarterly BAS by Amex.Collecting the points.Then getting everything refunded!

That thought has crossed my mind. For instance paying all of the "gst collected" in a month when I need lots of points to make booking then amending the BAS to include "gust paid to suppliers".

For all of the accountants etc I am not doing anything like that ( Intentionally). I did double pay some Payg ealier this year..

 

[serfty]

Of course one needs to balance any interest/benefit that may be earned by having said funds accessible against point/mile/reward earn.

 

[Flashback]

I've got my last (very small) HECS (now called HELP) statement sitting here that I need to pay. I wonder whether I can pay this online via the ATO credit card payment site.

It gives me a payment reference number, so I can't really see why not.

Edit: well, it all seemed to go through OK so hurrah, am now debt free!

 

[cove]

Congratulations on going debt free.
If I was in charge (which I am not) I would give you an extra vote.
Both PRN and EFT codes work when paying taxes by credit card.
I handed in my Tax Agent registration to do more traveling so off we go!
One of my pet hates is any government changing it's department name to maximize our cost of governing.

 

[New Chump]

The ATO has updated is web page to include some guidelines on when the 0.65%/1.25% card payment fee would be deductible:

Credit card payment fee deductibility guidelines

I don't find the guidelines easy to follow, but I think they are saying (at least in the case of those who are self employed, or partners in a partnership, paying quarterly PAYG instalments): unless the tax liability you are paying with your credit card is itself deductible (which the PAYG instalment liability normally isn't), then the card payment fee isn't deductible 1.

1 I am in no way shape or form qualified to give tax advice.

 

[JohnK]

Edit: well, it all seemed to go through OK so hurrah, am now debt free!

Aren't you lucky?

Don't make the same mistakes I did and you may stay debt free.

 

[medhead]

I don't find the guidelines easy to follow, but I think they are saying (at least in the case of those who are self employed, or partners in a partnership, paying quarterly PAYG instalments): unless the tax liability you are paying with your credit card is itself deductible (which the PAYG instalment liability normally isn't), then the card payment fee isn't deductible

I'm no expert either but I would have thought a payg installment would be deductible as it is basically part of the expense of employing staff. Surely salary/wages are a deductible expense.

 

[cove]

I am pleased that our partner (the TAX OFFICE) has issued a statement on this.
If the ATO is giving you the deduction you could use the more expensive AMEX card to make those payments as the cost is being subsidised nicely from 0.83 cents per point to as low as 0.444 cents per point.(assuming a 1.5 point per dollar card).
Your Business Class ticket To LAX becomes 192,000 times 0.444 cents which is $845 plus a few fees.
See you out there!

 

[serfty]

...

I don't find the guidelines easy to follow, but I think they are saying (at least in the case of those who are self employed, or partners in a partnership, paying quarterly PAYG instalments): unless the tax liability you are paying with your credit card is itself deductible (which the PAYG instalment liability normally isn't), then the card payment fee isn't deductible 1.

1 I am in no way shape or form qualified to give tax advice.

IANAL, but looking at the deductability definitions, most card payments fees could/should easily be 'deductable':

The CPF is deductible to the extent that:

• you incurred it as a result of paying an income tax liability and you did not borrow money from your card provider to make the payment
• you incurred it as a result of paying a goods and services tax, fringe benefits tax, luxury car tax or wine equalisation tax liability, and that liability arose in the course of gaining or producing your assessable income, or in the course of carrying on your business for the purposes of gaining or producing assessable income
• you incurred it as a result of making PAYG withholding payments where you can claim a deduction for the wages and salaries that gave rise to the withholding obligation
• you incurred it as a result of repaying your student assistance loans and then only to the extent that the expenses you paid using the student assistance loans were themselves deductible
• you incurred it as a result of repaying your employee’s student assistance loan, the repayment is a fringe benefit, and the employee’s wages are also deductible.

 

[cove]

This is a very generous summary for most taxpayers.