Yahoo Finance Tax return deadline: why October 31 might not be that scary anyway
As it turns out folks, Halloween isn’t even the scariest thing about October 31st for us Aussies. You guessed it – your Tax Return might be due! *shudder*.
The ATO only really wants you to worry about October 31 if you are a self-lodger, or if you failed to lodge your return for the previous financial year on time.
So what happens if you miss the tax deadline? Failure-to-lodge penalties range from $222 for individuals and small businesses and up to $11,000 for large businesses. The $222 penalty can actually increase every 28 days, up to five times until you lodge which means the fine could grow to $1,110 over five months.
However the good new is, if you lodged your last tax return (2020/21) on time, and through a registered tax agent, the due date for your 2021/22 tax return isn’t actually until May 15, 2023. That gives you plenty of time to sort through that shoebox full of receipts.
So, despite those scary headlines, the reality is your tax return will only be due on October 31 if one of two things applies to you:
1- You lodged your last tax return (2020/21) yourself using MyGov
or
2- You didn’t lodge a tax return last year at all
But there is in fact a trick (or treat) to this, my friends!
Get an accountant ASAP
If you lodged your tax return yourself last year using MyGov - and you don’t have an accountant - you should get one, stat, to extend that deadline until May 2023.
A quick web search will give you a list of accountants close by. Give them a call and either book an appointment or find out about their online tax return services.
That’s right, you don’t even need to leave the house to get your return done - most of us are doing this now (thanks, COVID.
“But what about the cost?” I hear you ask.
While the cost of seeing an accountant to lodge your return could blow out if there are complicated inclusions, like investment properties, cryptocurrency, shares or business income, the reality is, for most people, the cost to complete a standard return using an accountant shouldn’t be too wild.
If you’re an employee with average deductions, you should expect to pay somewhere between $120-$180 per return, depending on time and complexity.
So, if you can get yourself added to the client list of a registered tax agent by October 31, your due date will automatically be extended to May 15, 2023. Hooray!
There are very many reasons to see an accountant, and this is by far one of the greatest perks of doing so. (That and being consistently held accountable for terrible record keeping and your penchant for - how to say it politely - exaggerating expenses. Have I triggered you? Good!)
You might be thinking: “What’s the point of seeing an accountant? My return is so easy, I can do it myself”. And that’s probably true, but the value of seeing an accountant to prepare your return is not only in the little tips and tricks we have to maximise your refund, it’s in the time we get to spend together, each year, even if it’s only 30 minutes.
I get to chat with my clients about so many useful things - tax, super, interest rates, inflation, budgeting, record keeping, property, and the list goes on. Who knows what topic we might touch on in the time we spend together, or what hot tip you might pick up in that time.
Oh and the cost of seeing an accountant is tax deductible! It’s a win-win really.
Also read: Top tax claims you didn't know you could make
Also read: Got your first job? Here's what you need to know about your taxes
Also read: Why using a tax accountant can save you you thousands of dollars
Didn’t lodge your tax return at all?
If you do fall into the second category, I’m afraid there is no magic solution for you. Even if you can secure a spot on an accountant’s client register by October 31, your due date will not change.
The ATO does not look favourably on late lodgers, particularly those who end up owing the tax man some dollars.
Penalties for late lodgement and general interest charges will accrue from the date your return initially fell due - not the date you actually lodge.
So, for example, if you don’t lodge your tax return for another 10 years, and the result of that return is a tax liability rather than a refund, you’ll be up for 10 years’ worth of interest charges. Yowza!
The hard part will be trying to find an accountant to accommodate you with only two days out from the deadline. (We’re a bit busy you guys!)
If this proves difficult, you can always just do your best to lodge your return via MyGov before 31/10, and then potentially have an accountant prepare an amendment for you down the line when there isn’t such a rush.
There is a two-year time frame for individual tax return amendments, so that could be a way around it too.
I recently saw a client who hadn’t lodged his tax return since 1997! I was like,”My dude, what have you even been doing the last quarter century?”
Turns out that, back in 2001, he had let four years’ worth of tax get away from him (he had some health issues at the time) and it was downhill from there.
He put it all in the ‘too-hard basket’, tied it up with a pretty ribbon, and had it loom over him for 25 years. Suffice to say, a weight was lifted when we eventually sorted it all out for him a few weeks ago, despite the cumulative $7,000 penalties for failing to lodge on time.
We’re currently working with the ATO to request a waiver of penalties, based on various health issues over the years, and they’ve been very understanding and compassionate so far.
If you have a few unlodged returns yourself, there is no better time than now to start churning through them.
I know all this might sound scary, but trust me, it doesn’t have to be. Just think of the ATO like any other character at your Halloween party this weekend – human underneath, in a flesh-eating zombie costume on top.
They don’t really want to eat your brains. They just want to keep you on your toes, while helping you fulfil your tax obligations.
More than anything, they want to work with you to understand why you’ve lodged late and if there is something they can do to help you along in the future.
Moral of the story – do your bloody tax return will ya? And consider seeing a registered tax agent. It’s not free (obviously), but we can free you from that pesky October 31 deadline.
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