Tax windfall awaits thousands

The tax refund season has begun and thousands of Kiwi workers could find themselves with a nice big present.

Now workers can check to see if they are owed any of the estimated $100 million in overpaid tax for the 2009 tax year. And it could be more likely than you'd think.

TaxRefunds.co.nz, a business that helps people file refund applications online, has calculated the chance of getting money back from Inland Revenue (IRD). For example, the table shows a worker on the average wage of $48,000 has a 20 percent chance of getting a payout with the average payment close to $245.

The probability climbs or falls depending on how much was earned. TaxRefund director Geoff Matthews said those hovering around the different tax brackets scored highly with those on $38,000 having a 55 percent chance of getting money back from IRD.

"It's like having a lottery ticket at the bottom of your drawer of course you're going to check it," he said.

Other factors that upped the chance of getting a return included only working for a few months of the year, earning more some months than others, having more than one job or being eligible for family tax credits.

Matthews said the likelihood of netting a refund, along with the average payout, was based on the 940,000 tax refund applications his company processed between when they opened in September 2008 and the end of the tax year in March.

So far, the company has helped return $50m to Kiwi workers and Matthews expects that to rise to $63m when all the returns in their system are processed.

Overall, the average chance for a rebate last year was 18 percent and the average refund sat at close to $200. But workers can apply to have the past five years assessed meaning potentially bigger returns. One person landed a $50,000 surprise return.

TaxRefunds has worked with the IRD to overcome processing delays by creating a new interface between the automated website and the IRD. TaxRefunds charges nothing to get a refund estimate.

If someone decides to go ahead and file the claim with the IRD, the company charges 12.5 percent of the rebate amount, up to a maximum of $500. The minimum fee is $12.50 per return.

- © Fairfax NZ News