October 31 has come and gone, and if you haven’t lodged a tax return, this should set off an alarm bell or two.
While it’s not ideal to have missed the deadline, it’s not the end of the world. Here is everything you need to know about getting your income tax return done post-deadline.
Do you even need to file a tax return?
Yes. Everyone that earns more than $18,200 and has paid tax during the financial year is required to lodge a tax return with the Australian Taxation Office (ATO). But if you earned under this threshold, you may still be required to submit a non-lodgement advice – a document which explains that you don’t need to lodge, and gets you off the ATO’s checklist – to the ATO. Without submitting either a tax return or a non-lodgement advice, the ATO may take compliance action against you.
What are the key dates you should know
The general due date for Individuals is 31 October, with any payments required due by 21 March. The ATO began paying refunds from 18 July. If you don’t need to lodge a return, you will still need to notify the ATO by 30 June, 2018.
Tax agents or accountants that are registered with the Tax Practitioners Board can lodge returns on behalf of their clients after 31 October, but you must be registered with them before this date.
What could happen if you’re late
The first move by the ATO is to send you a letter with your “default assessment”. This contains an estimation of your income and the tax you may owe. This is the first warning. You may then receive a Failure To Lodge (FTL) penalty, with a maximum penalty of up to $1050. However, the penalty is only applied in the instance that you owe the tax office, not if you’re due a refund.
Still, this is when you need to take action. It’s rare, but the ATO can technically prosecute an individual for failing to lodge tax returns, with a maximum penalty of $8500 or 12 months in prison.
What you should do
1. Gather all the relevant documents
To lodge your return, you need the payment summaries for every job you’ve received income from in the financial year – which employers are legally obligated to provide. An accountant can help you estimate your income if you can’t get your payment summaries.
You will also need evidence of your relevant purchases from throughout the year that you wish to claim as tax deductions. While there are numerous regulations around what you can and cannot claim that a qualified accountant can talk you through, the general rule is that you can claim a reimbursement for goods and services related to your employment that weren’t covered by your employer.
2. Talk to an accountant
There are many ways of doing your own tax return before October 31, but if you’ve missed the lodgement deadline, you will really need the help of a professional.
A professional won’t just help you figure out your deductions to increase your chance of a refund, they could actually negotiate with the ATO to reduce any fines that could apply to your late return.
They can also contact the ATO on your behalf to let them know your tax return is underway. This could make them more lenient on you when it finally arrives.
3. Don’t stress
A missed personal income tax return isn’t the big focus of the ATO, but that doesn’t mean you shouldn’t contact an accountant and get your return started as soon as possible. Let this be a gentle reminder to stay on top of your taxes next financial year.
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