ATO (tax office) payments by credit card

[cove]

Ok that means we should see you out there!
Talking with your accountant/tax agent is the smart thing to do regarding your own tax affairs.
I am thinking of using Citibank,Bank West and Everydayrewards (Woolies) for the non deductible fees and then Amex Ultimate,Amex Velocity Platinum and Westpac Platinum Kris Flyer Amex for the deductible fees.
Now I still call my Tax Office girlfriend as it gives me more smiles per dollar.

 

[drcrox]

That's the new platinum Amex CHARGE card, not credit card, with no preset spending limit right?
Hmmm, I have one of those cards too and after I paid a BAS of $25k with the charge card I got a phone call from Amex saying I had exceeded their "comfort limit".
I replied that I was very comfortable thank-you, with my ability to repay that amount at the end if the month but they said they weren't. It seems a "comfort limit" is their euphemism for "your card is suspended, until you pay it off!" I have only been with them for 3 months and don't have a repayment history
The alternative of loading the card with cash is pretty useless as the points become rather expensive at 1.25%. Far better to have your cash in uBank or Rabobank for 46 days at 6.01% p.a.

Thanks.
My BAS payment will be only about half of yours and I have had a gold AMEX cc for 3 years which is paid off in full every month.
Hopefully this will give me some leeway with AMEX.
Pretty sure the 1.25% surcharge will be deductible which gives a cost of around 0.625 cents per point.
Crossing my fingers....

 

[cove]

Wow,they lowered the Visa and MasterCard fee to 0.48% from 0.65%.Amex is still 1.25%.
Thank you for making me look as I have been away for a month.
It certainly makes those point a dollar cards way more exciting on Visa and MasterCard.
Thank you Duffa you have made my day!

 

[kpc]

Wow,they lowered the Visa and MasterCard fee to 0.48% from 0.65%.Amex is still 1.25%.
Thank you for making me look as I have been away for a month.
It certainly makes those point a dollar cards way more exciting on Visa and MasterCard.
Thank you Duffa you have made my day!

Wow....if my accountant does not allow me to claim a tax deduction of the credit card surcharges, it is going to be very difficult not to use my 1Qff pt per $1 spent Visa card to pay my taxes now!

Even with a tax deduction, getting a QF point is still 0.19c per point cheaper using my Visa as opposed to my Amex Plat card to pay my taxes. The benefit with my AMEX is that I can TF to SQ, DJ, MH, Hotels etc....so maybe I will pay my taxes with Visa if I need a boost to my QF points account, otherwise stick with Amex:?:


Sent from my GT-I9000 using AustFreqFly App

 

[cove]

That rate change is very significant as it is now 0.48 cents for some Visa/MasterCards versus 0.833 cents for the best Amex cards before tax deductibility is considered with your accountant.

 

[moa999]

As a PAYG payer who has some excess quarterly bills.

I have been not using one of my cards - (either my Plat Charge or Plat Credit so as to ensure a zero balance).
1. Putting credit card into a credit balance - both the quarterly payment and the charge
2. Confirming the card is in credit
3. Paying the bill via the portal.
- thus ensuring I never 'borrow'

I lose 45 days @ 6% interest for the benefit of the tax deduction on the 1.25% (0.48% under new MCard)

With the switch in the Mastercard rate, I may have to consider getting a new Mastercard
(my Qantas Everydayrewards card is used too regurlarly)

 

[Deleted User]

With the switch in the Mastercard rate, I may have to consider getting a new Mastercard
(my Qantas Everydayrewards card is used too regurlarly)

Same here, I really should change my Woolworths / Qantas Everydayrewards Credit Card for the new plat card from HSBC, since I'm starting to run business expenses through the woolworths card which is not allowed. Other than the new card from HSBC for $199 p.a (10,000 sign on & 2 Qantas Pub passes every year), whats another Visa M/C card out there with a 1:1 QFF earn...?

 

[Cruiser Elite]

Other than the new card from HSBC for $199 p.a............whats another Visa M/C card out there with a 1:1 QFF earn...?

Citi Select, Citi Platinum, Citi Signature, CitiBusiness Gold

 

[Deleted User]

Citi Select, Citi Platinum, Citi Signature, CitiBusiness Gold

Unfortunately those cards are unavailable to self employed or sole traders these days...!

 

[Cruiser Elite]

Unfortunately those cards are unavailable to self employed or sole traders these days...!

Yes mate I am only too aware how difficult it is for SE, ST's and SB's to get Citi cards - I got one after 3 knock backs - next step is Select - will keep you informed.

 

[Stephen65]

That's the new platinum Amex CHARGE card, not credit card, with no preset spending limit right?
Hmmm, I have one of those cards too and after I paid a BAS of $25k with the charge card I got a phone call from Amex saying I had exceeded their "comfort limit".
I replied that I was very comfortable thank-you, with my ability to repay that amount at the end if the month but they said they weren't. It seems a "comfort limit" is their euphemism for "your card is suspended, until you pay it off!" I have only been with them for 3 months and don't have a repayment history

Duffa, the way to do this is to ring Amex in advance and tell them what you intend to do. That way they can check to see whether the transaction will exceed their "comfort limit" and if it does they can authorise it in advance. Doing it this way keeps you onside with them and they are more likely to authorise further increases in the future.

 

[Stephen65]

Unfortunately those cards are unavailable to self employed or sole traders these days...!

I got a Citibusiness Gold card late last year and I am a self-employed sole trader. I did have a year's credit history with Citi though prior to that with a Citi Plat card and a perfect credit history.

 

[Stephen65]

I do exactly as you do except for dot point 1.
My accountant told me that even though I'm self employed, I am paying my personal tax with a credit card (borrowed money) and therefore cannot deduct.
My staff PAYG, GST etc, which are costs of running a business are deductible and therefore, so is the ATO credit card fee.

Duffa

If you are a self-employed sole trader then IMHO your accountant's advice about not getting a deduction for CC fees with respect to payment of your personal tax is wrong.

I suggest you direct your accountant to this ATO ID about deductions for interest borrowing costs for sole traders and ask him/her why the same reasoning does not apply to the CC fee:

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

 

[Deleted User]

Duffa

If you are a self-employed sole trader then IMHO your accountant's advice about not getting a deduction for CC fees with respect to payment of your personal tax is wrong.

I suggest you direct your accountant to this ATO ID about deductions for interest borrowing costs for sole traders and ask him/her why the same reasoning does not apply to the CC fee:

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

I agree, as a sole trader or small business, if you are allowed to claim a deduction for interest, then it would appear that the CC payment fee should be treated the same...

I also believe that I am an employee of my own business and my business pays my personal tax bill. As a sole trader / small business I think it is safe to say that the CC payment fee would be fairly easy to argue is a business cost hence deductable, irrespective of borrowed money or not

 

[Stephen65]

If you are a self-employed sole trader then you are not any sort of employee. Rather you carry on a business under your own name and will earn income and incur costs that are in the nature of business income and costs respectively. That income and those costs will be returned by you as part of your personal income tax return because they are your income and your costs. You are the legal entity carrying on the business and as such the business income and costs are dealt with in your tax return.

This is legally and tax speaking a very different situation from being an employee of a company you own which runs a business, even if you are the sole employee and only owner of the company. In that case the legal entity that runs the business is the company and not you. The income of the business will be income of the company and the costs of the business will be costs of the company, both of which the company will return in its own tax return.

 

[cove]

I have started to change my Tax Office payment plan seeing the Australian Taxation Office have lowered the Visa rate to 0.48%.
For Citi Kris points and Citi Emirates card holders it just gets so much better as the earn rates per dollar are 1.33 and probably 1.5 points a dollar respectively.
You will need to get a BPay facility increase to get the money transferred to Citi quickly and watch out for the capped points limit if you have a points capped card.
We have time to get set by October 21st or October 28th!
The Tax Office can get to be our best new travel agency for 2011.

 

[Duffa]

I have started to change my Tax Office payment plan seeing the Australian Taxation Office have lowered the Visa rate to 0.48%.
For Citi Kris points and Citi Emirates card holders it just gets so much better as the earn rates per dollar are 1.33 and probably 1.5 points a dollar respectively.
You will need to get a BPay facility increase to get the money transferred to Citi quickly and watch out for the capped points limit if you have a points capped card.
We have time to get set by October 21st or October 28th!
The Tax Office can get to be our best new travel agency for 2011.

CitiSelect converts at 1.33 (2x0.666)
CitiPlatinum converts at .83 (1.25x0.666)
is the $400 upgrade worth the extra points?

 

[cove]

In my case the answer is YES.
I have BAS plus quarterly taxes but don't feel too sorry for me!
The budget spend has been greater than $30,000 but this new Visa rate will cut that by almost half for those points I need to keep the family up the front of many planes.

 

[Peter2]

I have started to change my Tax Office payment plan seeing the Australian Taxation Office have lowered the Visa rate to 0.48%.....
......
You will need to get a BPay facility increase to get the money transferred to Citi quickly and watch out for the capped points limit if you have a points capped card.
We have time to get set by October 21st or October 28th!
The Tax Office can get to be our best new travel agency for 2011.

Thanks Cove for the great 0.48% news update, this make it an even more attractive carrot.... looks like another mega tax payment time.... The last one caused Citi to suspend my preloaded card (they thought I was money laundering with the tax office!). Citi call center is definitely worse than water torture.

I think in an earlier email you said it is best to call someone @ Citi first to let them know.... I shall have to dig out your remarks (unless you have them handy). I was given the direct phone number of Citi Security but I may have misplaced this....

Peter

 

[cove]

Peter I started the BPay at $50,000 a day today and I will keep phoning my tax office girlfriend each day to avoid the card going massively into credit.
It is a bit more effort compared with cashing a big cheque at Westpac but the saving is worth using the Visa.