Instalment activity statement

[sus]

I received Instalmet activity statement from ATO ask me to pay $119 every quarter this year. It said my tax return includes $3437 of business/investment income. PAYG instalment rate of 13.02%.
Can someone please explain to me what is this?
I am individual, DO NOT has any business other than investment in shares and term deposit.

Thank you for your help

 

[numbercruncher]

Re: Instalmet activity statement

Its pay as you go income tax for things like bank Interest, you can opt to pay this annually if the option to do so was done by a certain date and your extra income was under a certain threshold, dont worry thou, just pay it and youll get a refund at the end of the year if you over paid on tax at all

ps tax office gives friendly honest advice if you ever have a query just give them a call

 

[sus]

Re: Instalmet activity statement

Thank you for your explanation.
Very much appreciated

 

[GreatPig]

You generally get a choice of whether you want to just pay the amount they say (ie. the $119) or use the instalment rate method (ie. the 13%). Choose the one you think will be best for you for the rest of the financial year. If you choose the rate method, it means you have to add up all your untaxed income each quarter (eg. bank interest) and then pay 13% of that.

Depending on your circumstances, one method can sometimes mean paying significantly less tax in advance than the other. For example, if you got a big untaxed windfall this year for some reason, just pay the $119, or if you don't have any untaxed income now (eg. there's no longer any funds in the bank earning interest) and you expect it to stay that way, then choose the rate method.

Also, if it was a one-off untaxed income event that won't be repeated (at least not this financial year), then you can vary the amount or rate to closer reflect what you think will really happen this year. However, be careful not to underestimate otherwise you could be penalised. Given how little the amount is though, it's probably not worth the effort.

Cheers,
GP

 

[Fool]

Yeah I had the same letter, I gave them a call and they explained it all. Basically the easiest thing to do is pay the amount on the letter, because if you calculate your income wrong there are fees involved come tax time. So with share its difficult to calculate your predicted income within an 80% margin, which is required by ATO