ATO warning: Loophole to extend tax deadline as fines loom

It's less than a month until Australia's first tax deadline. (Source: Getty) (Samantha Menzies)

If you plan to lodge your tax return yourself, you need to be aware that the deadline for lodging your return is now less than a month away. Millions of people have already lodged their 2023 return but many more are yet to take action, and for some the clock is rapidly counting down. But there is a way to extend that deadline. Here are the dates you need to put in your diary to avoid being fined.

Also by Mark Chapman:

• Property investors watch out: ATO cracks down on rental claims

• 5 tax myths debunked: What’s true and what’s false

• Tax refunds to shrink: Here’s why and what to do about it

October 31, 2023 deadline

With millions of dollars of unclaimed refunds on the table, it makes sense to take action now in order to get back any tax that you are owed. The latest date for self-lodgers to get their tax returns to the Australian Taxation Office (ATO) is October 31, 2023. If you lodge after that date, you run the risk of incurring a late fine.

Self-lodgers who fail to lodge by October 31 could be hit with an immediate late lodgement penalty of $313, increasing by a further $313 for each successive 28-day period that the return remains outstanding, up to a maximum of $1,565. If you still fail to lodge once the maximum penalty is reached, the ATO can issue you with a default assessment (in effect, an estimate of what the ATO thinks your income is) or they can prosecute you. Penalties are not generally applied where you are owed a refund by the ATO or you have a nil return.

May 15, 2024 deadline

If you think you may not be able to meet the October 31 deadline, you should seriously consider visiting a tax agent in order to benefit from an extended tax lodgement deadline of May 15, 2024. That’s because the ATO gives tax agents concessional extended deadlines which mean that they can lodge returns on behalf of clients up to this date without incurring any penalty. But you must be registered with the agent by October 31 in order to benefit.

ATO gives tax agents concessional extended deadlines which mean that they can lodge returns on behalf of clients up to [May 15, 2024] without incurring any penalty

Generally speaking, around 70 per cent of taxpayers use a tax agent, a figure that rises to over 95 per cent for small business owners. If you are entitled (or believe you are entitled) to claim deductions, either for your business or as part of your job, it makes sense to get an expert to prepare your return in order to ensure that you claim everything you’re entitled to.

With only a few days left to go, you might well be feeling the pressure if you haven’t yet started your return. My key tip is that you should really be considering using a tax agent, particularly if you have been deterred from completing your return so far by the complexity of the task.

Not lodged your 2022 return yet?

The bad news is that if you have a return outstanding from an earlier year, like 2022, you can’t take advantage of the extended tax agent deadlines for your 2023 return, even if you use a tax agent. So, you must lodge this year’s return by October 31, 2023 in order to avoid a late-lodgement penalty.

And, whilst you’re about it, it makes sense to get any prior year returns done too. Don’t worry if you’re missing information about your income and/or deductions for those earlier years. Your tax agent will typically be able to help by drawing on information already held by the ATO and advising you on what deductions you can claim.

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