ATO (tax office) payments by credit card

[angusburns]

I always transfer to my credit card the amount owing to the ATO and then in another transaction the cc fee. When it hits my credit card, usually the next day, I then make a payment to ATO for exactly that combined amount.

Some may argue that technically the CC AC should be in fully credit by the amount being paid but I think that my intent of not using borrowed money is quite clear.

I have not got an ATO ruling on this so don't know if it would stand up in court but I believe that the man on the Clapham omnibus would see my actions as being reasonable so am happy to run with that.

No opinion on CGT being an income tax, sorry. As I pre-pay my credit cards each time before I pay the ATO I do not think it should be an issue for me either way.

YMMV... depends on your risk profile - Caveat emptor!

 

[rechoboam]

Just planning my tax affairs, not sure if I should re-raise the CC fee deductibility question again. But the website says CC fees on payment of income tax is deductible provided the money is not borrowed. So I just put my card into a positive balance?

Any opinions about Capital gains tax being "income tax" or otherwise? (yes I am asking for an opinion not advice)


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You need specialist advice, too complicated depends on timings and which entity holds it.

If you have an interest-free period are you even borrowing? Anyway the amount of fee is so small I don't think it is material given all the other problems I have to deal with.

 

[medhead]

You need specialist advice, too complicated depends on timings and which entity holds it.

If you have an interest-free period are you even borrowing? Anyway the amount of fee is so small I don't think it is material given all the other problems I have to deal with.

Potentially it is very complex. It sounds like preloading my card is the safest bet. With timing I'm assuming i can't prepaid tax until I incur the liability. Given I won't have the cash to pay the tax until I incur the liability, I hope timing is ok.

Valuable advice everyone, gives me much thinking to do.


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[wafliron]

I am turning into a socialist.

After the discussions we've been having over in the "private health insurance rebate means testing" thread, I think I'm going to make this quote my signature ;-)

 

[Deleted User]

If you have an interest-free period are you even borrowing?

Yes you are borrowing, however you are in an agreement where there is no interest calculated on what you borrow until the stated time has elapsed, usually ~45 to ~55 days...

Also, as mentioned here before, if your tax liability is based on an ABN / Business / Sole Trader, then the tight rules such as not using borrowed money do not seem to apply. Also as a business / sole trader the credit card fee is deductible, and my accountant gave this advice based on my circumstances as a sole trader...

As with all tax advise, you really need to speak to your own accountant to have some guidance based on your circumstances...!

 

[wafliron]

I, like cove, am finding myself starting to look forward to tax payment time... :shock:

Earned just over 100k points paying tax today for a "cost" of -$150 or so (negative cause I'm making actually more money on this by parking the cash in offset accounts for an extra month than the ATO CC fees cost)... love it My biggest "problem" is not having enough space on CCs - I could've made 300k points today if I had the limits to do it

 

[angusburns]

To pick up the extra 200k points just overpay your credit card to put it in credit before you pay. Works for me.

 

[Origin]

To pick up the extra 200k points just overpay your credit card to put it in credit before you pay. Works for me.

I do note on some cards you still can't do a transaction amount greater than your credit limit in one go. To get around this you just do multiple transactions. Ie if you have a $15K credit limit and your tax bill is $20K even if you put the card into credit by $5K you still need to do two transactions ie one for $15K and another for $5K. One transaction of $20K gets rejected.

As I say this is only on some cards in their terms and conditions.

 

[angusburns]

Yes, I am having an issue with NAB at the moment - they appear to have a cap of $15,000 per BPay transaction, but you can do multiples on the same day - they said there was no limit at NAB so must be at Citibank or perhaps even BPay.

However, yesterday I transferred $25k+ via BPay from an Adelaide Bank account, also to Citibank, with no problems, so the issue seems to be with NAB, not Citibank nor Bpay.

Still waiting for NAB to come back to me with an answer on this.

 

[MelUser]

Waiting for 6pm (Eastern Summer Time) to tick over to keep it off today's transactions!

 

[wafliron]

To pick up the extra 200k points just overpay your credit card to put it in credit before you pay. Works for me.

Unfortunately, for reasons I won't go into here, I can't do this. Likewise, I also can't do what cove does and pay the tax bills over a period of time (cycling money into the card via BPay / out to the ATO each day). So I'm stuck getting as many points as my combined CC limits will allow, and despite my best efforts I haven't been able to increase said limits to a level that lets me tax full advantage of the system :-(

 

[Cruiser Elite]

wafliron I am in Melb also - wanna sit down to formulate a strategy to cultivate all those pts going begging?

I can smell a deal just begging to be done!

 

[wafliron]

wafliron I am in Melb also - wanna sit down to formulate a strategy to cultivate all those pts going begging?

I can smell a deal just begging to be done!

Unfortunately I can't - will PM.

 

[Deleted User]

so many big number players in this thread now.... me, just a small fish, how sad...

 

[Cruiser Elite]

so many big number players in this thread now.... me, just a small fish, how sad...

Little fish are sweet shintaro - little fish are sweet.

Most of us have to work our coughs off to maximize pt generation.

 

[Origin]

so many big number players in this thread now.... me, just a small fish, how sad...

Only a small sole trader here. BAS is usually between $15k to $20k
Still adds up to a few points over the year when you add in other business and private spending.

However to get the points up usually need to use Amex at the higher cost.

 

[Stephen65]

Does anyone know if ATO gets cross if you make the payment 1 day late.

I was thinking of making 28 Feb Payments on 29 Feb to make sure it falls in new statement. From date of paying it normally takes 1 to 2 days before it will appear on statement - ie if I make a payment 28 Feb it will show up as paid 29 Feb. If I pay 29 Feb it will show on statEMENT as 1 March.

Any thoughts - is 1, 2 or even 7 days late OK?

It depends on your compliance history. If you have a good record with the ATO then the odd day here or there will not matter. They will automatically waive the GIC (interest) that arises and at worst you will get a computer generated form letter reminding you to do it on time next time. If you start making a habit of it then they will get increasingly nasty e.g. start off by not waiving the GIC and eventually they will issue you with a fine.

 

[wafliron]

so many big number players in this thread now.... me, just a small fish, how sad...

I'm only a little fish... just riding on the back of a big one ;-)

 

[rechoboam]

Only a small sole trader here. BAS is usually between $15k to $20k
Still adds up to a few points over the year when you add in other business and private spending.

However to get the points up usually need to use Amex at the higher cost.

This is GST? As a business don't you have business or income tax to pay with CC?

 

[Duffa]

I am definitely in need of therapy. My accountant texted me, my BAS this morning and I was most upset that it is only half what I usually pay. All to do with "input credits last quarter" whatever that means.
Now he is really p@@@ed off that I'm complaining about LOWER taxes.
Still, my friend let me pay his 30k personal tax on card.