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Late lodgers face fines but aren’t completely out of luck
It usually pays to lodge your taxes on time, but you have a few options if you miss the deadline.
Late lodgers face fines but aren’t completely out of luck
It usually pays to lodge your taxes on time, but you have a few options if you miss the deadline.
Most taxpayers lodge their return ahead of the 31 October deadline for good reason.
Speaking to nestegg, H&R Block director of tax communications Mark Chapman explained that Australians who earn more than the current tax-free threshold of $18,200 over the course of the year are required to lodge their tax return by the end of October.
“In some cases, you may be required to lodge even if you earn less than that amount; for example, if you worked and had tax deducted from your pay,” he added.
If you don’t, Mr Chapman said that you could be looking at a stiff fine.
Failing to lodge your taxes by the deadline can incur financial penalties of as much as $1,110.
“The so-called ‘failure to lodge’ penalty is calculated at the rate of one penalty unit for each period of 28 days or part thereof that the return is overdue, up to a maximum of five penalty units,” Mr Chapman explained.
“The value of a penalty unit is currently $222, so the maximum penalty which can be applied for an individual is $1,110.”
Even if you do miss that deadline and risk penalties, Mr Chapman said that you might still luck out.
While the penalty for late lodgers is normally applied automatically, he noted that it is not normally applied to returns that either have a nil result or generate a refund.
“In addition, where a penalty is applied, the ATO will sometimes remit it where it is fair and reasonable to do so; for example, in the event of natural disaster or serious illness,” he said.
Of course, there’s one other way that cheeky late lodgers can avoid being fined by the ATO.
Despite the looming deadline, Mr Chapman revealed that “you can actually lodge much later than that without being penalised”.
“You simply need to be registered as a tax agent client by 31 October 2021 and you can lodge your tax return through that agent as late as 15 May 2022,” he said.
CPA senior manager for tax policy Elinor Kasapidis told nestegg that engaging an accountant could give you until well into 2022 to lodge your 2020–21 tax return.
“But you must make sure you are registered as a client with your tax agent to be eligible to delay lodging your tax return,” she said.
For those worried about missing the deadline, Ms Kasapidis recommended keeping calm and seeking advice from an expert.
“Don’t rush through your tax return, as this may lead to mistakes,” she said.
“Remember, you can cut your own hair, but you’ll get a better result if you see a professional.
“It’s the same with completing your tax return. If you see a tax agent, you can be confident you’re paying the right amount of tax and getting the maximum refund you’re entitled to.”
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