ATO (tax office) payments by credit card

[Stephen65]

• Is there an upper limit to the amount of tax you can pay by cc, specifically Amex?

The maximum the ATO portal will accept on any one transaction is $50,000. However there is nothing to stop you paying a tax bill in several transactions and I have done this.

• When I used my Visa to pay my BAS the netbank transaction stated something like "this will be noted as a cash advance". As cash advances do not usually attract points have I been dudded?

I do not understand this. You pay your tax bill using the ATO's own special credit card payment portal, which is at:

https://www.optussmartpay.com/governmenteasypay-ato/

You do not use netbank.

Transactions I have done through this portal always show up as regular transactions earning points on both my Commonwealth and Amex cards. For example, a recent entry in my CBA CC statement reads:

26/07/2011

AMEX ATO PAYMENT SYDNEY 001

$(amount)

 

[travelislife]

And I must ask why you left off the flood levy in your calculation. That is a one per cent extra in 2012 making the highest rate 47.5% I think.Get rid of that mortgage as quickly as you can if it is not tax deductible as you can work out how much you have to earn to pay for it.

Cove the Flood Levy isn't a percentage tax on your total income. It is like income tax and has various levels where it kicks in. Like how the first $6000 earned is tax free, ie. you don't pay 46.5% on your total income. So you can't say that the flood levy makes it 47.5% as that isn't correct. You pay nothing on the first 50,000, 0.5% on any income over 50,000 up to 100,000, then 1% for income earned over 100,000.

 

[crow]

Cove is correct when referring to top marginal rate in 2011/12.

If your income is above the $180,000 threshold and therefore your marginal tax rate is 45% + 1.5% Medicare them you are also paying the 1% flood levy making the top marginal rate 47.5%.

 

[New Chump]

Just paid my $27,500 PAYG on the NAB Amex for 1.5 points per dollar uncapped.

Surcharge of $343.75 which is tax deductible therefore costs me $183.91 after tax.

Hi crow.

At the risk of asking a personal question, how is the ATO card payment fee tax deductible for you?

I looked into it in a bit of detail a while ago and couldn't make it so for me (at least without pre-loading the card with funds, which is not worth doing if you have a non-deductible loan and prefer to make use of the interest-free days on the card for the ATO payment.) (See post no.312 in this thread: http://www.australianfrequentflyer.c...-17109-32.html (ATO (tax office) payments by credit card)

Deductibility all depends on your personal circumstances though.

NC

 

[sookie2]

Thanks - that's a great help. I wasn't aware of the special portal but will use it in future - thanks for your help.

 

[sookie2]

Thanks - that's a great help. I wasn't aware of the special portal but will use it in future - thanks for your help.

 

[Stephen65]

@sookie2

You're welcome. Read this ATO page as well:

How to pay

 

[cove]

It's ok to phone my TAX OFFICE girlfriend on the 1 300 phone number. She won't mind and you can pay up to 5 lots of $50,000 per phone call. It takes about 10 minutes to clock up 379,687 points per phone call if you are using a point and a half bank branded Amex card and paying $250,000.
Naturally you can pay a lot less and still have a smile on your face.

 

[sookie2]

Thanks - my tax-payers frown will turn to a smile when I see the points!

 

[cove]

Seeing there are some folks out there with BAS or quarterly taxes due later in October I thought this thread needed to make a brief comeback to give time to those who need to get a credit card or two ready to harvest points.

 

[Stephen65]

Yes I just got my first quarter BAS and I don't feel nearly as bad as I otherwise would now I have calculated the MR points I will reap from it.

 

[Pushka]

Seeing there are some folks out there with BAS or quarterly taxes due later in October I thought this thread needed to make a brief comeback to give time to those who need to get a credit card or two ready to harvest points.

Thank you thank you thank you. Last quarter I tried paying our GST liability and PAYG liability using internet banking but when it showed as a cash deduction from the credit card, I stopped and paid cash through BPay. But now I see there is a special portal for doing this AND I will earn FF points to boot! excellent timing Cove!

 

[Pushka]

I will get my accountant to check, but as I will be using the credit card for a Business (pty ltd) then any fees will be taxable? Lordy, I am almost excited to be paying GST and PAYG payments.

 

[Stephen65]

There can be collateral benefits aside from the points:

- A friend of mine I showed how to do this got an invitation from his CC issuer bank last week for dinner for him and his wife at an extremely nice restaurant because simply by putting his BAS through his CC he became on the spot one of that bank's top Amex CC spenders in the state. They wished to express their gratitude for his high spend with a free dinner.

- There can also be a timing benefit if you pay the ATO at a time when you'll get maximum benefit from the 45-55 days interest free. Better having that BAS money in your bank account than theirs.

 

[Stephen65]

I will get my accountant to check, but as I will be using the credit card for a Business (pty ltd) then any fees will be taxable? Lordy, I am almost excited to be paying GST and PAYG payments.

We discussed tax deductibility for the fee a while back in the thread. The ATO have issued three interpretative decisions saying the fees are not deductible for employees but have conspicuously avoided the subject whether they are deductible for the self-employed and companies.

IMHO* the fees should be deductible for the self-employed and companies for the same reason that interest those entities incur to borrow to pay tax is deductible to them but not to the employed.

* - not legal or accounting advice, check with your own adviser!

 

[Pushka]

We discussed tax deductibility for the fee a while back in the thread. The ATO have issued three interpretative decisions saying the fees are not deductible for employees but have conspicuously avoided the subject whether they are deductible for the self-employed and companies.

IMHO* the fees should be deductible for the self-employed and companies for the same reason that interest those entities incur to borrow to pay tax is deductible to them but not to the employed.

* - not legal or accounting advice, check with your own adviser!

Thanks Stephen. I did try to search using "Pty Ltd" but came up with nothing. It is a pain when someone 'discovers' an old thread and asks the "same old same old" so I appreciate your politeness in giving me the 'non definitive" answer from the ATO.

And yes, the logic about the Interest being Tax deductible for Companies is true, but we ain't talking logic here!

 

[KLN]

"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."

i've copied this from the ATO where the payment portal is.........my take on it is that if you use the CC to borrow the money to make the payment, the fee's are NOT deductible.
what i do is have my CC completely paid off down to $0.00 a couple of days before the BAS is due. Transfer the $ amount of my BAS onto my CC, so it is in credit before the payment is made, that way i am NOT borrowing to make the payment. Therefore my CPF (Card Payment Fee) is deductible.
i am lucky enough that my cash flow is good enough to do this as my average BAS is between $25,000 - $40,000.
Bring on Oct 28. this will be my first BAS on a Platinum triple point card. all previous on double points only.

 

[Pushka]

"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

what i do is have my CC completely paid off down to $0.00 a couple of days before the BAS is due. Transfer the $ amount of my BAS onto my CC, so it is in credit before the payment is made, that way i am NOT borrowing to make the payment. Therefore my CPF (Card Payment Fee) is deductible.
i am lucky enough that my cash flow is good enough to do this as my average BAS is between $25,000 - $40,000..

But unless you also transfer to the Credit card the same $$ as you are debiting for the BAS, (in addition to zeroing out your balance before doing it) you are still borrowing money from the card provider.

 

[serfty]

I am not an accountant. I did discuss this with my accountant and his advise was:

The fee is tax dectable when making a payment in relation to your BAS.

With that, these these two points are particularly pertinant as they directly relate:

• 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

The "you did not borrow money from your card provider to make the payment" specifically relates personal income tax payments: "you incurred it as a result of paying an income tax liability" .

Finally, the use of a 'charge' card has the implication that no money is borrowed in relation to income tax payments.

 

[Pushka]

I am not an accountant. I did discuss this with my accountant and his advise was:
The "you did not borrow money from your card provider to make the payment" specifically relates personal income tax payments: "you incurred it as a result of paying an income tax liability" .Finally, the use of a 'charge' card has the implication that no money is borrowed in relation to income tax payments.

Which really means that as long as you are paying your Business's BAS statement (and not a tax liability eg Income Tax), then you don't need to do this in order to claim deductibility of the credit charges?

what i do is have my CC completely paid off down to $0.00 a couple of days before the BAS is due.

or non