ATO (tax office) payments by credit card

[rechoboam]

If that were to happen we could go to an airline and buy chunks of points directly from them rather than thru the banks.
In Australia there are 11 million members total in the two biggest schemes so it is a pretty solid way to keep it all running.
I still remember meeting a fellow about 20 years ago who was credit carding a $600,000 telephone bill and I thought how sweet that would be! I think that brief conversation turned me into a fiend and there has been no turning back.
Quite a number of us look forward to receiving and paying tax bills now.

How would you buy from Airlines cove?

And $600000 on a phone bill?? Thank god for VOIP

 

[Stephen65]

I don't see why the ATO would stop taking CCs when it costs them nothing (beyond a possible deduction for the merchant fee) and it ensures they get paid. If the ATO can get people to pay by CC who wouldn't otherwise pay then they are ahead. It's probably also advantageous to them because a payment by CC is less likely to be clawed back as a preference if the taxpayer goes into bankruptcy/liquidation soon after paying. As others have said its more likely that CC providers might cut the earn on these transactions though if they are getting their merchant fee on a riskless and cheap transaction (no insurance costs on a tax transaction) why would they?

Just one issue I will note about preloading your card: some CC reward terms and conditions exclude you from earning points if the transaction is made when the card is in credit. For example the CBA Reward T&Cs says:

The Bank reserves the right to refuse to award points:

- to the extent that any transaction is debited against credit funds in the Member's account

I've never heard of this being enforced though.

 

[Flashback]

How would you buy from Airlines cove?

And $600000 on a phone bill?? Thank god for VOIP

Methinks you missed the point .. never mind!

 

[QF WP]

Well there are two ways to buy from Airlines:
- buying direct (ie. Top ups)
- the cove way

I know which one I'd rather

 

[Stephen65]

Me too.

Buy QFF points from QF for a 2.8 cents each and capped at 20,000 per year

OR

Use my Citibusiness Gold to pay my tax bills and get QFF points at 0.21 cents each and capped only at the amount of my tax bills

 

[Flashback]

Well there are two ways to buy from Airlines:
- buying direct (ie. Top ups)
- the cove way

I know which one I'd rather

I'm guessing option 1

 

[QF WP]

Stephen65 just alerted me to the third option which would be the most popular one used here (why didn't I think of that)....

Just wish I could access the FFP's flowing out of my company door...they get put on a CC with no points or paid by BPAY or direct credit :cry:

 

[cove]

The Stephen65 plan is a really good one as the net price is very attractive.

 

[Pushka]

Pre-loading the card, so you have a credit balance, will mean you are not "borrowing money" when you pay Cove's girlfiend - you are using your own funds. Depends on your personal situation, but if you are a normal wage/salary earner then it should mean the ATO card payment fee is deductible.

NC

We are ok to deduct that interest as we are doing this for our business. Our personal tax comes straight back to us through negative gearing and also much of our income is dividends from our Company, so automatically 30% tax paid.

Those examples are simply wonderful, even if a tad late!

My accountant told us today of our tax bill today. He thinks I am insane. I smiled when he told me.

 

[KLN]

finally got my one last invoice in for March, so will be happy to do BAS next week to get it over and done with. flying out to Barcelona 3/5 J on Singapore to meet Mr. KLN who's been away for 2 weeks already before doing Spain F1 and Monaco F1. just want to make sure everything is done and paid for before going away, including the April PAYG, which i'll be doing on 1/5.
haven't had more than 12 days holiday since 1992 and have been running our own business since 1996, so am looking fwd to this.

 

[QF WP]

One thinks that you'll be enjoying your holiday KLN thinking of all those FF points going into your accounts

 

[QF WP]

My accountant told us today of our tax bill today. He thinks I am insane. I smiled when he told me.

My accountant gave me the news today that I was getting a sizeable refund, as are my wife and both kids for 2010/11 tax returns. "Damn, I want to pay tax" I told her and explained how everyone here was scoring magical FF points. Now she thinks I'm crazy

Beggars can't be choosers

 

[Deleted User]

My accountant gave me the news today that I was getting a sizeable refund, as are my wife and both kids for 2010/11 tax returns. "Damn, I want to pay tax" I told her and explained how everyone here was scoring magical FF points. Now she thinks I'm crazy

Beggars can't be choosers

LW,

If U in the tax paying mood, should I provide you with my EFT code so that you can pay my GST & PAYG for Q1 2012...

Edit: Loving the cheap QFF, however still paying too much tax here in this country I think...!

Edit / Edit: Took my first DJ Flight today for a while, saw the changes to their product, but still not really convinced with that camp, nice plane, nice J cabin but really lacking something...? Just seemed simplistic, or am I being over critical...?

 

[cove]

KLN you are one of our success stories. Enjoy the European vacation...it should be really good fun.

 

[QF WP]

You'll need to give me 3 weeks so I get the refund into my bank account and clear my CC after all that AA mileage buying

 

[Deleted User]

You'll need to give me 3 weeks so I get the refund into my bank account and clear my CC after all that AA mileage buying

Perhaps time to add to the deck of cards he he

 

[Pushka]

My accountant gave me the news today that I was getting a sizeable refund,o

Oh, I am so sorry to hear that Lindsay. What a waste.

 

[wafliron]

Pre-loading the card, so you have a credit balance, will mean you are not "borrowing money" when you pay Cove's girlfiend - you are using your own funds. Depends on your personal situation, but if you are a normal wage/salary earner then it should mean the ATO card payment fee is 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.

Has anyone asked their accountant about the deductibility of the fee when paying company tax? It's not explicitly mentioned in the ATO deductibility guidelines document.

I am now wondering whether I should change accountants, given (1) she sent me this THREE YEARS :shock: after JS first posted here on the subject (many thanks JS, by the way); and (2) she is only getting 0.5 points on her visa spend.

Sadly, I think she is actually ahead of the game for an accountant, in that she realises it's possible to pay tax through your credit card and recognises that there is some benefits to doing so. I've mentioned tax payments on CCs to three different accountants: all of them didn't know it was possible and had a "why would you want to do that?" response, even after I tried to explain the benefits.

I don't think the ATO will stop accepting credit cards, rather the banks will stop crediting points to these types of transactions. (ala Amex's new changes)

This is my major concern too, assuming it's not costing the ATO anything :-(

That being said, I have been wondering if it does actually cost the ATO money - if they're subsidising the merchant fees in return for getting more tax bills paid on time. 0.48% is significantly lower than any merchant fee I've ever heard mentioned for Visa / MC, especially for platinum (and above) cards.

Just one issue I will note about preloading your card: some CC reward terms and conditions exclude you from earning points if the transaction is made when the card is in credit. For example the CBA Reward T&Cs says:

The Bank reserves the right to refuse to award points:

- to the extent that any transaction is debited against credit funds in the Member's account

I've never heard of this being enforced though.

All of the Citibank card T&Cs say something similar - I think it's no points if you're more than $10,000 in credit. Call centre staff know about this rule too - I've asked before. Never heard of it being enforced though - IIRC cove is loading up his Citi cards into significant credit balances all the time and has never had an issue getting points credited.

 

[cove]

I did get some audit/fraud phone calls last year but I satisfied their questions about whether it was really me and not someone else paying their tax bill on my card.
We have other cards ready for the just in case scenario of a stoppage.

 

[serfty]

Has anyone asked their accountant about the deductibility of the fee when paying company tax? It's not explicitly mentioned in the ATO deductibility guidelines document.....

I believe it is mentioned (you ≡ entity ≡ company) see the red bit: (Credit card payment fee deductibility guidelines)

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.