As Benjamin Franklin so famously said, the two certainties in life are death… and tax. Indeed, the Australian Taxation Office is firm about its deadlines for the lodgement of annual tax returns.
Most people are required to lodge a return every year, but the truth is that falling behind is much more common and easy than you might think.
Why are people late?
There are several reasons for this. People’s lives are simply hectic and unpredictable, they may have been overseas or in hospital or just fallen behind with their accounting, or perhaps the prospect of doing their tax was just too overwhelming as they ran their complex lives and businesses.
However, the ATO can penalise taxpayers for being late. Basically, it’s $180 for every 28 days overdue, up to a maximum of $900. After that, default assessment warning letters can be sent out, which in most cases is an overestimation of what you really should pay – partly due to the lack of deductions. You can even be prosecuted.
Luckily, there is something you can do about it. The ATO often waives penalties if you have a good lodgement history, your other tax affairs are up to date, and it’s your only late return.
So what should you do?
Firstly, check your lodgement status, because it may be possible that for some years, you didn’t even need to lodge a return. In that case, it’s just a matter of submitting a non-lodgement advice form.
Then, through your accountant or even on your own, get clear about what years you need to make up for and start to put together the information you need.
Often your income information has already been sent to the ATO from your employer, bank, agencies and elsewhere, so having these ‘pre-filling reports’ may be everything you need to get up to date. To get up to date, you may be able to do it online with the ATO’s online systems. But the old ‘e-tax’ has been phased out, so lodgement for 2013 and earlier is no longer available.
If you’re too many years behind, you may need to request a paper return or call the ATO’s self-help phone service. Click here for an FAQ prepared by the ATO regarding late tax returns.
The easiest route is to go to a registered tax agent, who can handle everything for you with all of the knowledge and access to information at their fingertips.