Filing your first IR3

The IR3 is the annual income tax return every self-employed person files, and the first one carries all the anxiety of any first exam. It shouldn't: with records in order, the return is mostly transcription, and the parts that aren't are covered here. This guide walks the process from "the tax year just ended" to "assessed, with a plan for the bill."

When it happens

The tax year ends 31 March; the IR3 for it is due 7 July if you file yourself. A tax agent brings an extension of time (usually to 31 March the following year), which matters less for the filing and more for the terminal tax date that follows. Filing early beats filing at the deadline for one concrete reason: the sooner the numbers are certain, the longer you have to arrange the payment they imply.

Before you start: the three piles

• Income: every invoice for the year and what was actually received. If you were paid under schedular payments, that income and its withheld tax largely pre-populate in myIR; income nobody taxed at source is yours to declare.
• Expenses: the year's deductible costs, totalled by category, receipts filed (not submitted, but kept, for seven years).
• The part-year extras: if you left a salaried job mid-year, the PAYE months pre-populate; your self-employed months stack on top and are taxed accordingly.

Filing it in myIR

The return itself is a guided form in myIR. The pieces a first-time sole trader meets:

• Pre-populated income: salary, wages, and schedular payments with their tax credits appear automatically; check them rather than re-typing them.
• Self-employed income: your gross business income and your expenses. The result is your net profit, the number the brackets apply to.
• The IR10: a financial statements summary that accompanies business income, essentially your year compressed into standard boxes (income, expense categories, assets). With tidy records it's twenty minutes; without them it's the reason this guide keeps mentioning records.
• Other schedules if they apply: rental income, overseas income, and adjustments each have their own attachment.

What happens after

Inland Revenue processes the return into an assessment: your residual income tax, minus anything withheld or already paid. Then the calendar takes over:

• The bill (terminal tax) is due 7 February following, or 7 April with an agent. It was earned across the year just gone, which is why the set-aside habit is the whole difference between a transfer and a crisis.
• If your residual income tax passed $5,000, you're now a provisional taxpayer, and the double-hit year is scheduled. Read that guide before February, not after.
• Mistakes are fixable: returns can be amended in myIR after filing, so an error discovered later is a correction, not a confession.

How Coffer helps

A first IR3 is exactly as hard as the year's records are messy. Coffer keeps the inputs return-ready as a side effect of invoicing: every invoice and payment date on file, expenses categorised, GST held separately so your figures are GST-exclusive by construction, and the tax already set aside against the assessment the return produces. The return becomes transcription, which is all it ever should have been.