With the IRD’s new technological capabilities, they can now cross-check your PIR against your taxable earnings to catch any discrepancies or individuals trying to bend the rules. So, it’s crucial to ensure your PIR is correct to stay compliant and avoid any unwanted scrutiny.
Have you heard the recent news? The Inland Revenue Department (IRD) has stepped up its game with a technology update that enables them to check if your KiwiSaver account’s Prescribed Investor Rate (PIR) tax is accurate. It’s time to ensure you’re on the right PIR rate to avoid any potential issues with the IRD!
What is the PIR rate, you ask? Well, it’s the way the government taxes the earnings on your investments, including your KiwiSaver account. Just like you pay tax on any interest earned in your bank accounts or dividends from shares, the PIR tax rate applies to your KiwiSaver returns.
Choosing the correct PIR rate can have a significant impact on your KiwiSaver returns. By aligning your PIR with your income tax rate, you can optimise your after-tax earnings, leading to better long-term outcomes for your retirement savings. Not to mention, falling into the wrong category may result in discrepancies, penalties, or additional taxes owed
It can be a complex system, so if you’re uncertain about your PIR or how to determine the appropriate rate for your situation, no need to panic, I’m here to lend a helping hand. Let’s get you on the right track and ensure your KiwiSaver tax obligations are in order.
Mike Bennett AFA
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