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  • How to avoid a tax debt

    Tax pre-payment

    If you're concerned you'll get a tax bill because you're close to the threshold amount to pay tax, you can choose to make a tax pre-payment.

    A pre-payment is a voluntary payment made in advance for an expected tax bill. You can make pre-payments at any time and as often as you like to make it easier for you to manage your tax.

    Any payments made towards your tax before they are due will remain on your account unless you, or your agent, request a refund.

    If you have an existing tax debt, pre-payments may be used to offset against it.

    Pay as you go instalments

    If you're earning (or expecting to earn) more than $4,000 a year from renting out a room or a whole house or unit you can consider entering the pay as you go instalment (PAYGI) system voluntarily.

    This will stop you getting a large tax bill at the end of the year where you can pay amounts every three months (quarterly) to help cover any income tax you may need to pay on your sharing economy income.

    If you pay too much during the year, you will get the money back when you do your tax return.

    If you don’t pay enough during the year, you'll pay the difference when you do your tax return (but it will be less than if you didn’t pay anything at all).

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    Last modified: 02 Jul 2018QC 53231