Saving any money in a cost-of-living crisis is difficult, but many of us still funnel what we can into a savings account and let it earn interest, hoping to build enough for big-ticket items such as a home deposit.
However a simple mistake could lead to any interest you earn being removed from your account.
One Suncorp Bank customer noticed the loss when looking through their savings account, realising that whenever they earned credit interest, they would immediately have almost half of it quickly taken away.
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While they were in small increments, over one financial year the swiftly removed funds totalled almost $100.
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The relatively unknown tax is called resident withholding tax, and is applied to your account when you haven’t provided your bank with your tax file number (TFN).
“Withholding tax may apply to interest earned on Suncorp Bank deposit accounts if a customer has not provided their TFN or TFN exemption,” a Suncorp Bank spokesperson told 7NEWS.com.au.
This money is then paid to the Australian Taxation Office (ATO).
The Suncorp Bank customer was taxed on more than $200 in additional income for the year as a result.
A Suncorp Bank customer realised a simple mistake was causing money to disappear from their bank account. Credit: 7NEWS
In good news, providing your bank with your TFN or relevant exemption will put an end to any future resident withholding tax taken from your account.
Getting your money back is also an option.
“When money is withheld during the same financial year, customers can seek an immediate reimbursement by sharing their TFN or exemption with us either in branch or by phone,” the Suncorp Bank spokesperson said.
“For refunds outside of the same financial year, customers are required to contact the ATO.
“We encourage Suncorp Bank customers to get in touch with us quickly if they have concerns on a withholding tax matter.”
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