Here’s what you need to know…
Tax Return Requirement
As long as you have an active Tax File Number (TFN), you are required to lodge a tax return for that respective year (1st July – 30th June). This is normally done during Tax Season.
In a tax return, you are required to declare all income that you earned in that period of time, and then determine how much tax is refundable to you, or that you would have to pay.
During the year, you would have already paid some tax automatically, with your employer helping to withhold tax for you, based on their estimate on the amount of tax you are to pay for the year. This usually leads to a tax refund during tax season, if more tax had been withheld than what was required, as well as after you input your work expense deductions.
However, if too little tax was withheld, this is where a ‘payable’ or debt occurs as you would have to top-up to pay the tax owed on your income earned. You are able to claim your refund, or declare your payable by lodging your tax return.
Tax Lodgement Time Frame
Tax Season for the year is normally from July – October, with any Tax Returns not lodged by then deemed as “overdue”. Most people fall in this category.
However, for some clients that use Tax Agents, they are given a later due date to complete their taxes. This varies from client to client, and is completely up to the ATO’s discretion. Some factors that are included in their assessment for lodgement dates are if previous lodgements are done punctually, as well as if a Tax Agent is used for more than a year.
As tax agents, we might be able to help you request an extension, but you would need a legitimate reason for us to do so.
Penalties
If you do not lodge your tax return by the due date, you may be issued with a Failure to Lodge (FTL) penalty. The penalty amount is calculated using either a statutory formula, based on your behaviour and the amount of tax avoided, or in multiples of a “penalty unit”. The rate for one penalty unit is $222, and you may be liable for up to 5 times that amount ($1,110) per year not lodged, if the ATO decides to impose penalties. If you had a tax debt, there may also be interest charged on that debt.
What to do if you have not lodged your Tax Return
Don’t worry! If you have overdue Tax Returns from 2017 or later, you can LOG IN to our system to lodge it yourself!
Check out our Step-by-step guide HERE
If your overdue Tax Returns are for Financial Years earlier than 2017, do feel free to contact one of our accountants. We will be able to assist you in lodging these overdue tax returns, as well as checking if any further correspondence or action with the ATO is required.
For more info direct from the ATO, Click Here