$330 tax return fine hidden in the budget

The end of the financial year is just around the corner and Aussies will be soon hit with higher fines if they fail to lodge their returns on time. It’s thanks to a small detail that was included in the federal budget.

From July 1, the government will increase the cost of a Commonwealth penalty unit from $313 to $330. The 5.4 per cent increase was first flagged in the fine print of the mid-year budget and still needs to be passed by parliament.

Penalty units are used to calculate fine amounts for a number of offences. That includes fines for missing the tax return deadline, which can grow larger for every deadline you miss.

Tax time is just around the corner. And if you are late lodging your return, you will now face a tougher fine. (Source: Getty)

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Aussies can start lodging their tax returns from July 1 but the Australian Taxation Office (ATO) recommends people wait until the end of the month so they don’t miss out on any important information and slow down the progress of their return.

ATO assistant commissioner Rob Thomson said lodging too early could actually double your chances of having your tax return flagged as incorrect by the ATO.

“We see lots of mistakes in July where people have forgotten to include interest from banks, dividend income, payments from other government agencies and private health insurers,” Thomson said.

For most taxpayers, this information will be automatically pre-filled in their tax return by the end of July.

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What is the deadline for filing your tax return?

The deadline to file your tax return differs depending on whether you are doing it yourself or using a professional tax agent.

If you are lodging yourself, you have until October 31 to lodge your return. If you are using a tax agent, you need to register with one before October 31. The deadline can then vary depending on your circumstances but can be as late as May 15.

What is the penalty if you are late?

For the first 28 days your tax return is late, you will be hit with a $330 fine. This fine increases every 28 days you are overdue.

You can be fined up to five times for missing the deadline, meaning you could now face a maximum penalty of $1,650.

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