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Re: pre-filled PAYG Instalments

Superuser

Views 56

Replies 4

Hi,

The client is a sole trader, and the only other income is parenting payment single. (Registered for GST & PAYG W/H- has employees)

Her business made a profit last year-20 and losses this year-21.

Losses should be carried forward to later income years (also cannot apply Loss carryback offset as this is not a corporate entity).

She has ATO debts both in Income Tax Account & Integrated Client account, now on payment plans.

Tax Return pre-filled her PAYG Instalments and shows as a refund. (I understand that this represents the calculated liability regardless of the payment).

However, when the tax return is lodged, how does this work? Do we lodge the tax return with this information?

Thanks 

 

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Taxicorn Registered Tax Practitioner

Replies 3

The client is a sole trader, and the only other income is parenting payment single. (Registered for GST & PAYG W/H- has employees)

Her business made a profit last year-20 and losses this year-21.

Losses should be carried forward to later income years (also cannot apply Loss carryback offset as this is not a corporate entity).

She has ATO debts both in Income Tax Account & Integrated Client account, now on payment plans.

Tax Return pre-filled her PAYG Instalments and shows as a refund. (I understand that this represents the calculated liability regardless of the payment).

However, when the tax return is lodged, how does this work? Do we lodge the tax return with this information?

 

Tax refund will be applied to balance of unpaid ITA first, then unpaid ICA.

 

4 REPLIES 4

Most helpful response

Taxicorn Registered Tax Practitioner

Replies 3

The client is a sole trader, and the only other income is parenting payment single. (Registered for GST & PAYG W/H- has employees)

Her business made a profit last year-20 and losses this year-21.

Losses should be carried forward to later income years (also cannot apply Loss carryback offset as this is not a corporate entity).

She has ATO debts both in Income Tax Account & Integrated Client account, now on payment plans.

Tax Return pre-filled her PAYG Instalments and shows as a refund. (I understand that this represents the calculated liability regardless of the payment).

However, when the tax return is lodged, how does this work? Do we lodge the tax return with this information?

 

Tax refund will be applied to balance of unpaid ITA first, then unpaid ICA.

 

Superuser

Replies 2

Sorry, to clarify, she hasn’t actually paid any PAYG instalments during the year; they are all part of her ATO debts and on a payment plan. Some BASs were still outstanding @ year-end.

any liability to the sole trader in her accounts as BASs were outstanding? 

Is your answer still apply?

Thanks 

 

Taxicorn Registered Tax Practitioner

Replies 0

Sorry, to clarify, she hasn’t actually paid any PAYG instalments during the year; they are all part of her ATO debts and on a payment plan. Some BASs were still outstanding @ year-end.

any liability to the sole trader in her accounts as BASs were outstanding? 

Is your answer still apply?

 

Yes, that is what I have seen happen every time.

 

GST liability is in sole trader accounts, but not PAYGI.

 

Community Moderator

Replies 0

Hi @Mala14

 

@Bruce4Tax is right. Even if the PAYG instalments aren't paid yet, they'll still apply to the income tax return. It's how we reconcile the PAYG instalments. 

 

When the income tax return is lodged, the income tax credit will pay off the income tax debt first. This is because the tax return is lodged on the income tax account. If there are remaining credits after, they will go to the activity statement account. 

 

Remember that credits from lodgments do not replace payment plan instalments, and the client will need to continue with their payment plan, meeting all other obligations on time.