Yahoo Finance ATO warning as Aussie hit with $3,300 tax bill
One Aussie shared her shock at receiving a $3,332.45 income tax bill that’s due this week.
Many Aussies with a tax bill have just days left to pay up, or face being stung with an even bigger bill from the Australian Taxation Office (ATO).
If you lodged your tax return with a registered tax agent for the 2022-23 financial year, you have until March 21 to pay your tax bill. This applies if you lodged on or before February 12, 2024, with later due dates for those who lodged with an agent later than this.
If you don’t pay on time, the ATO will automatically charge you interest on what you owe. Your debt will grow each day it remains unpaid. Interest is calculated on a daily compounding basis at an annual rate of 11.38 per cent.
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One Aussie has gone viral after sharing her shock at receiving a $3,332.45 income tax bill, due this week.
Taleah Jayne shared on TikTok that the massive bill was due to her HECS debt, which she accrued studying a bachelor of law and psychology. She is now working in a field unrelated to her degree, working as a tyre fitter in the mines earning $150,000 per year.
“I am physically not ready for tax season this year,” one user commented.
“Yeah, I owe them $1,100 too. The moment I can afford the basic necessities in life I will pay them back,” another said.
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More Aussies would have received a lower tax refund or been hit with a tax bill last financial year. This is partly due to the low and middle income tax offset (LMITO) coming to an end on June 30, 2022.
ATO warns of ‘firmer action’
ATO assistant commissioner Jillian Kitto said anyone unable to pay their bill on time should reach out to the ATO or their tax professional before their bill is due.
“If you can’t pay your tax bill in full, you may be eligible for a payment plan. However, it’s likely that you will be better off financially if you pay in full and on time, rather than arranging a payment plan,” Kitto said previously.
“It is in your best interest to engage with the ATO before the bill is due if you can’t pay in full and on time. This means engaging with us before it becomes a tax debt where interest will accrue daily - and before we take firmer action.”
This can include issuing a garnishee notice to your bank or financial institution and getting them to pay your money directly to the ATO to reduce your debt.
What is a payment plan?
A payment plan lets you break down your tax bill into smaller amounts. You can make payments via weekly, fortnightly or monthly installments until the balance is paid off.
The ATO said installments would be spread over the shortest possible fixed period of time to reduce the interest you’d be charged, which would continue to accrue.
You can use the ATO’s online payment plan estimator to work out how much you can afford. You can set up a payment plan online, or contact the ATO for help and to discuss your individual circumstances.
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