If your mate has recently broken out in a sweat and has clammy hands, the good news is, he may not be suffering hay fever or coming down with the flu — he might just realise its tax time.
For thousands of Aussies that have never lodged a tax return or are years behind, the October 31 deadline for DIY tax returns serves as a nasty reminder.
An estimated 10 per cent of us fall into the “never lodged” camp with another 20 per cent in the “late lodgers” club. I too, must confess to being a past member of this club.
Mercifully, I resigned my membership decades ago.
“People have a number of reasons why they don’t lodge and the problem is, the longer it goes, the more scared they become” says Tempo tax and accounting director Elliott Brannen.
A visit to the Australian Taxation Office website doesn’t help.
Google “ATO late lodgement” and the first page is all about penalties. Read a little further and there’s some fun stuff about overdue interest charges and then it gets to the really good stuff about prosecution, fines and imprisonment.
All true and all entirely possible. But managed properly? All completely avoidable.
Avoiding the penalties alone can account for a reduction of more than half of your potential debt.
In many, many cases, taxpayers don’t realise the tax office owes them money.
Overpaid HECS repayments or partial employment through a tax year can all result in money coming back. And it can also save you some four-figure financial worry.
In July, tax office late lodgement penalties rose from $180 to $210 for each 28 days period a return is overdue. In less than four months, you can build up to the new maximum penalty of $1050.
DEADLINES
* The October 31 deadline is for people lodging their own tax return for the financial year to June 30, 2017.
* People can lodge their own tax return via the myTax internet portal, which can be accessed via the myGov web page.
PENALTIES
* The tax office will generally not impose a late-lodgement penalty for a late tax return, FBT return, annual GST return or activity statement if the return results in either a refund or a nil result.
* But a late-lodgement penalty will stand if the penalty was imposed before the return was filed, even if that return results in a refund or neutral result.
* You can ask for a penalty to be reduced or scrapped if there are extenuating circumstances, such as a natural disaster or serious illness.