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If you owe the ATO money, what’s the deadline to pay it back?

What's the deadline to pay your income debt? (Source: Getty)
What's the deadline to pay your income debt? (Source: Getty)

Tax season has officially come and gone: your tax return has been filed. But rather than receiving a sum back from the taxation office, you find you owe them money instead.

How long do you have to pay it back?

According to the Australian Taxation Office (ATO), you’ve generally got three weeks from today (1 November) before you have to cough up.

“If we calculate you have an income tax debt owing when you lodge your tax return, the due date for payment will be shown on your notice of assessment,” an ATO spokesperson told Yahoo Finance.

“Generally speaking, the due date will be no earlier than 21 November, unless your debt is for a previous financial year.”

The last day to file your tax return was technically yesterday, the 31st of October.

But there are ways to get around this: you can get it extended to May and sidestep the penalties if you file through a tax agent.

What do I do if I haven’t lodged my tax return yet?

Even though the deadline has passed now, the ATO urges Australians to lodge ASAP anyway.

“If a taxpayer is completing their own tax return and are unable to lodge by 31 October, they should contact us as soon as possible. Even if the deadline has passed, it is important to lodge as soon as they can,” the spokesperson said.

This is especially true if you think you’ll end up owing the ATO money. The taxation office can offer payment plans for those who think they will experience difficulty in paying the debt.

“If they expect a tax bill, they should not delay lodging. If they're finding it hard to pay on time, it's important they contact us early so we can work with them to make a payment plan tailored to their circumstances.”

Will I be fined because I haven’t lodged yet?

Yes, you can be hit with a penalty if you haven’t lodged your tax return on time.

The ATO will get in touch with you first through SMS texts, MyGov messages, by phone and by letter asking you why you haven’t lodged.

Then you might be hit with a Failure to Lodge (FTL) penalty if you have to lodge a return or activity statement with the ATO by a certain day but don’t.

“We recognise that sometimes people don't meet their lodgment obligations on time, even with the best intentions. Generally we don't apply penalties in isolated cases of late lodgment,” the ATO spokesperson said.

“We'll warn you by phone or in writing if you've failed to lodge. If we apply FTL penalty we'll send you a penalty notice stating the amount and due date of the penalty.”

If you owe the ATO money and you don’t pay on time, the taxation office actually charges you interest on every day you don’t pay. The interest rates can be found here.

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