ATO (tax office) payments by credit card

[Stargazer]

The best credit card to use depends on who you wish to fly with and the points earning rate on that card.

So which is the best card for collecting QF points without spending a fortune on the card. I have done quite a bit of research and there seem to be so many options. For example I read an article in the sydney morning herald which provided some of the answer.
The best credit cards to earn Qantas frequent flyer points

 

[MAX_1]

So which is the best card for collecting QF points without spending a fortune on the card. I have done quite a bit of research and there seem to be so many options. For example I read an article in the sydney morning herald which provided some of the answer.
The best credit cards to earn Qantas frequent flyer points

Depends on your spend and income , imo , the Woolworths Qantas Credit Card earns 1Qff point per $1 spend, Currently this card is available for ZERO fees first year plus a bonus of 5000 points. You will also receive a EDR Card which means that any purchase from Woolworths,Big W, BWS apart from the 1:1 if charged to the credit card will also earn bonus points. eg. $200 of groceries carged to the Woolies card will earn 370 points ( 200 from the card plus 170 from the rewards card - purchase value less $30 ). The normal costof the card is $89 per year and need an income of $50K with proof, in my case a copy of my Tax return as I was requesting a cmonthly credit limit of $30k , ended up getting $25K. Care must be made to always pay the whole card off each month otherwise you will make the bank very happy.....lol....with the interest that you will be charged. The card has no capping.
I have a business next to Woolworths, so when I am about to pay my tax, I turn up the day before at the front counter with a bundle of cash and ask for it to be paid onto my card and its instantly available to access ATO billing.

As far as the article in the SMH , it reaffirms why I no longer purchase newspapers

 

[serfty]

... As an invididual tax payer can I deduct the card payment fee or is this only possible if you are running a business?

...
The tax question really should be answered by your tax agent/accountant who knows your circumstances.

As far as the tax deductability of the fee goes, it can be. As indicated bu cove, it may pay to check with your accountant/tax advisor. However, for basic ground work, check out this post:

http://www.australianfrequentflyer....ffice-payments-credit-17109-8.html#post418273

Hi Serfty.

I have just completed my tax return for 09/10 and in doing so had a very close look at the ATO's deductibility guidelines. See: Credit card payment fee deductibility guidelines

This is a generalisation, but for a normal wage and salary earner, paying your tax by credit card will not make the ATO card payment fee deductible, because in using the card you are "borrowing money" from the card provider. There have been one or two earlier posts that suggest this may not be the case, but the ATO indicates that it is in 3 ATO Interpretative Decisions. See:
ATO ID 2010/159
ATO ID 2010/160
ATO ID 2010/161

However, if you pre-load your card so that it is in credit before you pay the ATO, then the card payment fee can be deductible. The ATO credit card fee deductibility guidelines say the fee is deductible as: "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". As the card was in credit, and you paid the ATO using your own funds (and not the card issuer's), the card payment fee is deductible. ATO 2010/160 supports this conclusion.

I appreciate that the ATO's deductibility guidelines do have some other scenarios where the fee may be deductible for some taxpayers, but if you are a normal wage and salary earner paying your tax on a credit card to rack up some points

, the ATO's fee aint a tax deduction

.
NC

Also, see here:

My accountant agreed with my conclusion (see post no.312 in this thread: http://www.australianfrequentflyer....ffice-payments-credit-17109-8.html#post418273 )

that preloading the card with my own funds, then paying the ATO, caused the card payment fee to be deductible, as there is no "borrowing money" in making the payment on the card. My 09/10 return was lodged this week with the ATO claiming that deduction.

I paid other ATO card payment fees during 09/10 but did not pre-load the card with my own funds to do so. I did not claim these fees as a deduction.

NC

See posts #357 and #358 of this thread for more.

 

[cove]

So far Woolworths Everydayrewards.com.au has not queried tax payments through 5 cards we have been using. The cards are in personal names. In the case of the two cards I use I have only put personal quarterly taxes on those but the other three have had BAS payments put on them.
For Qantas points this card is uncapped and first year is now free so producing a point a dollar for 0.48% gross on this MasterCard is almost as good as it gets.
The terms and conditions say it is a non business card so that should be read and understood. This card is uncapped as to points earning so it is a stand out if you read the Qantas web site area that lists credit cards that earn Qantas points.

 

[hummel]

Just wanted to say thanks to Cove for this thread. I've been watching this thread for a long time now, and telling the boss/parents to start paying their tax bill via Amex.

I'm glad to report they have finally action ed upon my suggestion and are now asking where can they go with their points. So the avability search begins!

On that note, can multiple people pay the tax billl? Folks are happy for me to pay on my Amex then reimburse me straight up. Viable option? If so.. possibly a good way to get spend up?

 

[Deleted User]

On that note, can multiple people pay the tax billl? Folks are happy for me to pay on my Amex then reimburse me straight up. Viable option? If so.. possibly a good way to get spend up?

ATO would not know / care who the payment came from, they would only care that it has been paid and that the reference numbers used for the payment are correct for the account being paid. Also if you are paying a tax bill for someone else, then there is no tax deduction on the CC fee allowable whatsoever...

 

[Stephen65]

The ATO will accept payment of tax from a third party so you could pay their tax for them on your CC and earn the points. The only possible downside is that you won't get a tax deduction for the surcharge while you might when paying your own tax.

EDIT: what shintaro10x said

 

[Duffa]

Folks are happy for me to pay on my Amex then reimburse me straight up. Viable option? If so.. possibly a good way to get spend up?

---

A great idea, except if you have a brother like mine, who still owes me for the car which he sold on my behalf in 1989!!

 

[KLN]

i am lucky enough to have an elderly Mother-In-Law, who's finances i organise. it's much easier for her to have me pay all her household bills, including her personal tax payments on my Amex................am happy to pay the surcharges, as it's quite worthwhile, then she just re-imburses us for her bills. nothing like controlling her internet banking too.

 

[rechoboam]

As far as the tax deductability of the fee goes, it can be. As indicated bu cove, it may pay to check with your accountant/tax advisor. However, for basic ground work, check out this post:

http://www.australianfrequentflyer....ffice-payments-credit-17109-8.html#post418273



Also, see here:See posts #357 and #358 of this thread for more.

I'm so glad my taxes pay for armies of people to write laws about deductibility of fees and whether cards are in credit, did I borrow etc etc....

 

[cove]

The Tax Department can really help you with their response.
"Stop thinking of it as Your Money".

Just remember the travel fun that js introduced to us with POST NUMBER ONE.
What a life changer for so many of us in AFF.

 

[wafliron]

Can anyone confirm which types of tax can be paid by CC? Is it all types? I know (from personal experience) that personal PAYG installments / end of year tax bills can, as can BAS, but what about company PAYG / end of yea billsr? PAYG paid by a company on behalf of its employees?

Thanks.

 

[serfty]

AFAIK, as long as you have a valid EFT code or PRN from your documentation, the credit card payment portal can be used.

The only issue is the deductability of the fee.

 

[Duffa]

AFAIK, as long as you have a valid EFT code or PRN from your documentation, the credit card payment portal can be used.

The only issue is the deductability of the fee.

Even without the deduction it's still a good deal at 0.48% per 1.33 points. Better still if you can keep that BAS money in a high interest account for another 50-55 days!

 

[wafliron]

AFAIK, as long as you have a valid EFT code or PRN from your documentation, the credit card payment portal can be used.

Great, thanks serfy. Anyone else paid company tax and/or PAYG on behalf of employees that can re-confirm this?

The only issue is the deductability of the fee.

Thanks for the warning, but not a concern for me though - the fee won't be tax deductible for me anyway.

Even without the deduction it's still a good deal at 0.48% per 1.33 points. Better still if you can keep that BAS money in a high interest account for another 50-55 days!

'zactly... or in a mortgage offset account. IIRC at current mortgage rates it takes ~25 credit card interest-free days (with the money parked in an offset account) to recoup the cost of the MC/Visa surcharge, at which point any FF points earned are free. If you can time the payment to achieve additional interest-free days then you actually end up in front in $$ terms (plus the free points).

 

[Pushka]

Even without the deduction it's still a good deal at 0.48% per 1.33 points. Better still if you can keep that BAS money in a high interest account for another 50-55 days!

And, if a business, the interest if it isn't paid off at the 55 days is maybe deductible if you have temporary cash flow issues? Same as a (very high) Business loan.

 

[Stephen65]

Interest costs incurred when you borrow to pay your tax may be deductible: generally speaking they are deductible if the taxpayer is either a company or a sole trader paying tax on business income but not if the taxpayer is partner or an employee:

ATO ID 2006/269 - Deductions and Expenses: interest incurred on moneys borrowed by a sole trader to pay income tax

Of course if you want to borrow to fund a tax payment there are much cheaper ways of doing it than paying CC interest. Drawing down on your business overdraft to pay off the CC before the 55 days expire for example.

 

[KLN]

Yes, can verify you ARE able to pay Company Tax and PAYG (for employees).
have just done both in the recent days.
despite the form saying that you are NOT able to pay via Credit Card.
Yes, just need the PRN detail on the ATO form.
am loving it!

Kathe

 

[cove]

Yes Kathe it is true that the ATO bills can all be credit carded even when some of the bills might say you cannot.
Mrscove has used up her 200 k Visa limit on one of her cards so that one goes on ice for 9 months when the new cap will commence.
Visa and MasterCard are so cheap if you are getting at least a point per dollar.
I still use Amex for some to avoid having the hard won credit limits reduced.
Who ever is in charge of the ATO printing has not been told to change the detail on some of those tax bills but for a Government Department you really don't need to move too quickly. It changed only 3 years and 9 months ago!
Australia Post is trialling a system at the moment so that may be a 2012 winner.

 

[Deleted User]

Yes Kathe it is true that the ATO bills can all be credit carded even when some of the bills might say you cannot.
Mrscove has used up her 200 k Visa limit on one of her cards so that one goes on ice for 9 months when the new cap will commence.
Visa and MasterCard are so cheap if you are getting at least a point per dollar.
I still use Amex for some to avoid having the hard won credit limits reduced.
Who ever is in charge of the ATO printing has not been told to change the detail on some of those tax bills but for a Government Department you really don't need to move too quickly. It changed only 3 years and 9 months ago!
Australia Post is trialling a system at the moment so that may be a 2012 winner.

Nice tease there cove, will it be in regard to the ato or something else...?