Yahoo Finance How to extend your tax return deadline to May
Australian taxpayers have until October 31 to lodge their tax returns, otherwise technically they are committing a crime.
But there is a legal way to go past that deadline without submitting anything, and not face a potential 12 months jail sentence.
The simple solution is to hire a tax agent to represent you.
The tax agent needs to be registered with the Tax Practitioners Board and the taxpayer must appoint them by October 31.
But if those conditions are met, you'll be granted an extension to May 31 if the tax liability is less than $20,000 or March 31 if the bill is more than that.
And the fee that the agent charges itself is tax-deductible.
Chartered Accountants ANZ senior tax advocate Susan Franks told Yahoo Finance extra time to lodge is not the only benefit in hiring an agent.
"Appointing a tax agent not only allows you extra time to get your tax sorted, it also provides you with a higher level of comfort that your tax return is right.
"This is particularly important given the [Australian Taxation Office]’s announcement that it will be scrutinising every tax return lodged."
The taxpayer must not be behind on any past tax returns for the extension to be granted.
Getting your tax return right
There is a $8.7 billion difference nationally between the amount of tax declared and the total that should have been declared, according to Franks.
"The ATO is on the lookout for incorrect claims, no matter how small," she said.
"The ATO is using its extensive data collection and sophisticated data analytics to compare taxpayers to others in similar occupations earning a similar salary. Deductions that are unusual or that are high are likely to be questioned."
The tax office, in recent years, has focused on busting dodgy work-related expense deductions.
"It is...closely examining deductions to ensure that only the work-related portion of expenses are claimed. A deduction is not allowed for any part of the expense that relates to personal use."
ATO commissioner Chris Jordan said in March that there would also be a crackdown on real estate investors.
"We’re seeing incorrect interest claims for the entire investment loan where it has been refinanced for private purposes, incorrect classification of capital works as repairs and maintenance, and taxpayers not apportioning deductions for holiday homes when they are not genuinely available for rent."
He revealed more than 2.1 million property investors claim more than $47.4 billion of deductions every year – but, incredibly, against just $44.1 billion of rental income.
"Understanding tax is challenging, so obtaining trusted accounting advice from your local Chartered Accountant will help ensure you are correctly claiming deductions this year," CA ANZ's Franks told Yahoo Finance.
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