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Late Tax Return Penalties Australia

A late tax return penalty can be substantial, but they are entirely avoidable. That is why it is important to know your tax deadlines and any penalties that may apply for failing to lodge on time.

In this blog, we will cover what an overdue tax return is, what the tax deadline is, what penalties apply for late payment, do you need receipts for overdue taxes, and what should you do if you have missed the tax deadline. This blog is for you if you have any overdue tax returns or wish to avoid future penalties or charges associated with not filing taxes on time.

What is an overdue tax return?

An overdue tax return is a tax return that has not been filed by the due date with the Australian Taxation Office (ATO). In essence, if you have not paid your outstanding tax before the deadline, it is considered overdue. Failure to do so may result in a late tax return fine.

When is the tax refund deadline?

The tax refund deadline for most people is October 31st every year. The deadline is the last day you can lodge your tax return without incurring any penalties. It is important to lodge your tax return prior to this date as you may incur fines or even imprisonment as failing to lodge is considered a criminal offence.

What is the tax penalty for late payment?

The ATO does not take late tax returns lightly. You can be hit with penalties and charges if you fail to meet your tax obligations. A late tax return fine may include the following:

  • Failure to lodge on time penalty: If you do not file your tax return before the deadline, the ATO may charge you a penalty of one penalty unit for every 28-day period up to a max of 5 penalty units. As of 1 July 2023, the penalty unit amount is $313. That means the maximum penalty for failing to lodge is $1,565.

Put simply, you may be required to pay $313 every 28 days up to a maximum of $1,565.

  • Interest on outstanding debt: The ATO may charge interest on unpaid tax. Which can increase the amount you are required to pay back.
  • Legal action: If you still have not paid your tax after a long period, you can receive a maximum of 12 months in prison. This process is a last resort. The ATO allows you every opportunity to pay your overdue lodgements before resorting to this option.

Please note, the penalties may only apply to you if you have a payable tax return. That means if you have a nil or a positive tax return, the punishments may not apply to you.

The ATO may also reduce or completely remove penalties if you have a valid reason that did not allow you to submit a return. For example, you were impacted by a serious illness or natural disaster.

Do you need receipts for overdue tax returns?

It is a common misconception that you are required to keep receipts to claim all deductions on your tax returns. If you have some type of record that supports your claims of expenses, then you may be able to claim a deduction. Some examples of records you can use include:

  • Logbooks for driving
  • Working from home diaries
  • Income and bank statements

For more information, read our blog, “What can you claim without receipts”.

I’ve missed my tax deadline – What should I do?

If you have missed the tax deadline, don’t stress. One Click Life can help you lodge overdue refunds to reduce the effect of any late tax return penalty. You can simply log in to One Click Life and your outstanding tax will appear automatically on the dashboard.

Click “Lodge” and complete your tax return within minutes!

How do you estimate your tax return?

You can use a tax return calculator to estimate your tax return. To use a tax return calculator just enter in your income and the amount of tax you have had withheld. You’ll be able to find this information on your final pay slip for the year. If you have lost this information you can contact One Click Life to recover this information for you.

You can then add your tax deductions into the tax calculator and you’ll receive an estimate of your tax return.

Check out our tax calculator here.

Lodge with One Click Life before it’s too late!

One Click Life allows you to complete your tax return online in minutes. Completing your tax online is the simplest and fastest way to claim your tax return.

One Click Life is a platform that is run by accountants that is easy to use and provides tax returns right at your fingertips. Manage all your life admin needs in a single place, so you can spend more time doing things you really enjoy in life.