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Tax advice???



why is it that the more income i report the more refund i get? i am using turbotax and i was just messing around with the numbers and i don't understand how that works. I don't want to get behind on paying but if they are saying i should get it back in a refund i guess it's okay as long as the numbers are all real right?

As this is in Aus & NZ taxes I assume that yu are in NZ becasue I have never heard of "turbo tax". But logically the more income you report the more tax you will pay unless you are putting it in the wrong place! If you are mistakenly adjusting one of the expenses up instead of income then yes you wil get a bigger refund. The other alternative is that you are an employee subject to PAYG withholding and your expenses/deductions are such that you get a refund and when you increase your income you are possibly over staating the tax withheld that is relevant to that level of income or you are overestimating your expenses deductions. Either way you dont pay less tax if you earn more money unless yuour are churning that money into aother investments or engaging in negative gearing etc.
As long as you input the correct numbers into each box, turbo tax is doing things correctly on their side and you're fine.
There is likely to be a simple explination.

The more income you earn the higher your tax bracket. This means you are paying a larger percentage of tax for your 'extra' pay.

All of your deductions are claimed against your highest rate of tax. So where you were getting back the tax paid at say 30% you are now getting back the tax you paid at 46%. That is a lot more in every dollar.
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