A tax expert is urging Aussies to stop “putting their heads in the sand” and get on top of their tax returns now. An estimated six million Aussies still haven’t lodged their 2024 tax returns with the Australian Taxation Office (ATO) and they are risking being slapped with a hefty fine.
Aussies have until October 31 to lodge their tax return if they are doing it themselves. Missing this deadline means you can be hit with a ‘failure to lodge penalty’ of up to $1,565.
Tax Invest Accounting director and registered tax agent Belinda Raso told Yahoo Finance the ATO generally penalises taxpayers that have a tax debt and won’t generally fine those who are getting a refund. However, she warned taxpayers not to “tempt fate”.
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“Most people with tax debts are the ones that are putting off lodging. I’ve had a couple of people message me and say, ‘I’ve got a $10,000 tax debt, I don’t want to lodge’,” she said.
“I’ve told them, ‘You are a prime candidate to get [penalised]. You have to lodge it and then get into a payment plan’.”
The failure to lodge penalty is charged every 28 days that your tax return is overdue. It currently starts at $313 to a maximum of five units, or $1,565.
The penalty can be applied automatically to those who lodge their tax returns late.
“I had a situation where we lodged a client’s tax return and she had five years outstanding. As we lodged it, we watched this in real-time,” Raso said.
“Of the five years she had outstanding, three had a tax debt and those three years automatically had a penalty failure to lodge come up straight away on her account.”
Aussies who are using a tax agent need to be on their books by the October 31 deadline. They then have until May 15 to lodge their returns.
What if I’m worried about a tax debt I can’t pay?
If you receive a tax debt that you can’t pay upfront, you can request a payment plan with the ATO. This allows you to break down your bill into smaller amounts repaid, weekly, fortnightly or monthly. However, it does attract interest.
“You can get a 12-month plan over the phone or online without even talking to anyone, but there are options to go up to two or three years if you contact the ATO,” Raso told Yahoo Finance.
“Every circumstance that I’ve seen they’ve been very supportive and they have worked with the person. They’re not trying to get blood out of a stone.
“What is happening is a lot of people are just putting their head in the sand and saying I can’t deal with it. That makes matters worse.”
Raso urged people to contact the ATO or an accountant if they needed to and get on top of their tax returns.
“Get your tax returns up to date. The ATO aren’t the enemy, they will work with you,” Raso said.
“They have a hardship plan to ensure that you can pay it off reasonably in a time that’s not going to put you under any duress.”
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