Haven’t lodged your tax return yet? Read this before the 31 October deadline!
The 31st of October is the scariest day in the Australian calendar. No, not Halloween - it’s the deadline for tax season.
This won’t impact you much if you filed your tax return as soon as possible in July, but if you’ve been delaying doing the deed? Things could definitely get a little bit spooky.
But what exactly happens if you leave things too late? We got the scoop from the experts at H&R Block.
What happens if I don’t file my tax return on time?
The Australian tax deadline is 31 October 2022 - which falls on a Monday this year, so there’s no “next business day” wiggle room.
If you haven’t lodged your tax return by this date, the penalties are pretty steep.
Director of Tax Communications for H&R Block, Mark Chaman, shares: “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. The value of a penalty unit is currently $222 so the maximum penalty which can be applied for an individual is $1,110.”
“The good news is that, whilst the penalty is normally applied automatically, 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.”
Let’s break that down.
File your taxes a week too late, and you’re risking a $222 bill. Getting a little stressed out?
Breathe a little bit. If you’re expecting a lot back in your tax return, or likely to break even, you might not be the prime focus of the Australian Tax Office (ATO).
But if you think you’re going to end up with a tax bill? It’s even more important to get your tax return lodged on time, because all tax bill payments are due on 21 November. After 21 November, interest will apply to any payment owing.
Okay, but you’re reading this and you’re looking at your pile of documents and you can’t begin to fathom getting your taxes filed by 31 October? All is not lost.
How can I get an extension on my taxes?
Believe it or not, that 31 October deadline is really only set in stone if you’re determined to lodge your taxes yourself. If you foresee an issue getting your tax filed in time, you might want to book in with a tax agent.
“You can 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 2023,” says Chaman.
With 70% of Aussies using a tax agent (and roughly 95% of small businesses doing the same), it’s one way to make sure you make the most of your deductions this tax season instead of getting caught in a last minute rush.
The shortcut method for calculating your work-from-home rate is due to end this year, and the low- and middle-income tax offset is only applicable when you lodge this year. By working with a tax agent, you could avoid the stress of last minute taxes - and avoid leaving money on the table.