ATO (tax office) payments by credit card

[ZeroPoint]

The maximum you can pay is 5 lots of $50000 per phone call so that is a total of $250000 plus the credit card fees. If you owe more you make another phone call or two until the bill is paid.
Westpac for me has been so easy....cash a large cheque into the card on the day the tax is due then go back from the bank to make the phone calls.
Citibank is harder because if you put a cheque deposit in thru Australia Post it takes 6 days for the funds to clear into the credit card limit.
American Express Ultimate won't allow your account to go into credit so I phone the funds thru every 3 days.
You need to have good sized credit limits to pay large tax bills.

You can use NAB as it takes 3 days since it's banking institution.

 

[New Chump]

The maximum you can pay is 5 lots of $50000 per phone call so that is a total of $250000 plus the credit card fees. If you owe more you make another phone call or two until the bill is paid.
Westpac for me has been so easy....cash a large cheque into the card on the day the tax is due then go back from the bank to make the phone calls.
Citibank is harder because if you put a cheque deposit in thru Australia Post it takes 6 days for the funds to clear into the credit card limit.
American Express Ultimate won't allow your account to go into credit so I phone the funds thru every 3 days.
You need to have good sized credit limits to pay large tax bills.

Hi Cove.

For the Citibank option, why dont you open either (1) a Citi Online Cash Manager account and transfer funds electronically to it the day before you want to pay your tax; or (2) a Citi Readycredit account and Bpay funds to it the day before you want to pay your tax. Then on the day you pay your tax, simply transfer the $ to your Cit Select card via Citi internet banking?

Cheers

NC

 

[malmacdowall]

Hi Cove.

For the Citibank option, why dont you open either (1) a Citi Online Cash Manager account and transfer funds electronically to it the day before you want to pay your tax; or (2) a Citi Readycredit account and Bpay funds to it the day before you want to pay your tax. Then on the day you pay your tax, simply transfer the $ to your Cit Select card via Citi internet banking?

Cheers

NC

Hi NC... Thanks for the citibank tips... Just got my emirates platinum card and plan to put $100k through it is year.... Should see the entire family to Paris in 3-4 years time.... Noice.... Particularly if I can make the payments easier .... Mal

 

[cove]

Hello NC,
BPay ex Bankwest is 5k a day so I have sent a cheque by airbag Tuesday night to Citi in Sydney to see if that too is a 6 day thing.
Thanks for your other account alternatives as 6 days a month on say $250000 is too expensive in lost opportunities on 72 days of money a year.
If all else fails just using 80k limits a month still works but I want it to work on all my choices.
Using Amex Ultimate I can re-load every 3 days so that allows 2 times 100,000 times 2 cards so that works ok.
With Westpac Kris Amex I can cash a cheque into our 88k limit cards then pay out immediately so that one is just so easy.

 

[cove]

Based on the receipt numbers rising on the phone service to my girlfriend the automaton there are quite a few of us using the phone service. Yes it is the quaint way for a 61 year old and of course she is so re-assuring with her voice!

 

[albatross710]

I am also surprised by how many people don't know about it. I have met 5 accounting/bookkeeping professional sin the past two months whom have assured me that it isn't possible to pay taxes on credit card as it isn't a payment option [on the stationary].

It's been a good week for this for me this week. Due to the deferrals available from the floods, The 28th March is my date for paying everything up to date, once again almost pleasurable to be paying it on the KF Amex.

 

[angusburns]

Has anyone mentioned that the Card Payment Fee (CPF) itself is tax deductible?

So if you pay by, for example, WBC VISA or CitiBusiness VISA you get 1 FF pt per $.

Cost is 0.65% (CPF) but, assuming the top personal tax rate of 48% then your post tax-cost is about 0.31% or about 1/3c per point, not free but not too bad.

If you then redeem for a ticket with a 3% yield (ie where 1FF pt gets 3c of value, eg 50,000 FF Pts for a ticket that costs $1,500) then you paid 1/3c to get 3c value in airfares.

This is not as good as points with no CPF but not too bad, especially if you need some points to bring your account value up to a level you can redeem for the flight(s) you want.

Just my 1/3c worth... Hope it helps someone.

See the ATO website page headed "Credit card payment fee deductibility guidelines"
Sorry the forum rules state that I can't post links.

 

[serfty]

Has anyone mentioned that the Card Payment Fee (CPF) itself is tax deductible? ...

Yes, that is mentioned upthread (see from post #195).

Note that the actually Deductibility of the fee can vary depending on the type of card used to pay and what is actually being paid. Having a close look shows that it's not hard to ensure that deductibility applies.

 

[angusburns]

Thanks.

BTW, does JASA stand for Business Any Seat Award and FASA for First Class Any Seat Award? Could not find a definition anywhere but took a guess based on the context they are used in... am I correct?

TIA!

 

[serfty]

... am I correct?

TIA!

Yep!

For more, see here: Abbreviations and Explanations

 

[cove]

Yes JASA PER-SYD or PER-MEL costs 42,990 each way as a minimum which earns 80 status credits and some Frequent Flyer points which vary based on status.
Then multiply your cost based on your net cost of points and you have it.
The figures just get better if you pull a FASA say MEL-LAX for about 160k points.
Enjoy your ride!

 

[New Chump]

Yes, that is mentioned upthread (see from post #195).

Note that the actually Deductibility of the fee can vary depending on the type of card used to pay and what is actually being paid. Having a close look shows that it's not hard to ensure that deductibility applies.

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

 

[cove]

I still regularly run into business folks who could run up 10 million or more points but just keep paying electronic transfers to pay taxes.
Such a waste of an opportunity!

 

[oz_mark]

I still regularly run into business folks who could run up 10 million or more points but just keep paying electronic transfers to pay taxes.
Such a waste of an opportunity!

At least it helps keep the competition for those reward seats down.!

 

[Deleted User]

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.

Is it actually borrowing money before the statement has been presented to the user for payment...? Or is it borrowing money after the due date of the statement when interest is then payable until the full amount has been paid...?

Why don't they make it simple and define if the credit card account must be in "credit" prior to the payment to meet the charge being tax deductible.

 

[cove]

Simplify the Tax Act......now there is an idea.
Wayne Swan has announced a Tax Summit which should get as much through put as Ken Henry got from his big review.
Just stop thinking the money in your pocket is yours.

OZ_mark I promise I won't steal your seat but you'll need to wrestle with Mrscove as she wants those Platinum tags. I will just go along for the ride.

 

[angusburns]

FWIW, I always transfer the amount to be paid to the ATO from my business cheque account to my VISA card and then also make a second payment equal to the 0.65% card fee.

That way, on my statement I have two deposits from cheque to VISA account one day and then two matching payments to the ATO the next day. Makes it much easier to reconcile when doing end of year accounts and tax returns as well.

From a practical point of view, I usually have to transfer first anyway or the extra lump sum would either exceed or at best reduce the available credit limit for the rest of the month.

This does not usually put the VISA account in credit for the full payment amount but I feel pretty sure that the exact money going in before it goes out should be good enough for a reasonable person to see I am not using credit, although not sure about the ATO... as always, ask your accountant.

Hope this helps.

 

[serfty]

Of course, if you use a "Charge Card"¹ it basically becomes moot!²


¹ ... and pay in time

² ... unless it's a penalty or a Medicare type payment

 

[Maca44]

I have been trying for years to convert my friend into the advantages of frequent flyer points, but he is not interested. So, being the nice guy I am, I recently paid his $60K BAS bill for him on my credit card. Its nice to be nice

 

[cove]

Now that is a real help!
Oz_mark is worried that we are coming to steal his seat so be careful of his needs.