Avoided lodging your tax returns for years? Stop running and start doing something about it!
For most, lodging their tax return is a fact of life. It happens once a year, like obtaining a pink slip for the car or popping by the dental clinic for a clean and checkup. For others, it just does not happen… and it hasn’t happened for many years.
Once one lodgement date has been missed, one can turn into two and before you know it, this can easily cascade into several years of missed returns. Fear not though! It’s never too late to do your taxes.
Here are 5 reasons why you should stop avoiding lodging your taxes:
- You may be due a refund: Many taxpayers fear a dreaded tax payable come tax time. Seeking expert advice could mean finding out that you’re entitled to tax deductions, discounts or possibly exemptions that you may not have previously been aware of.
- The ATO can be quite understanding: The ATO understands how taxes may not be the number one priority in life during times of severe hardship. Often they consider all circumstances, such as financial difficulties, personal grievances and unforeseen circumstances before deciding what action to take. For isolated cases of late lodgement, it is common that warnings (instead of penalties) are issued. The ATO can also offer payment plans or lodgement deferrals to help taxpayers get back on track.
- Penalties can apply for non-lodgement: The ATO can issue at their discretion a failure to lodge on time penalty, which means that you are likely to be penalised by $330 for each 28 days that the return is late (up to a maximum of $1,650).
- Default assessments can be issued: Although the ATO’s preferred approach is to work with taxpayers to help them meet their lodgements, occasionally the ATO may issue a default assessment. These are an estimate of what the ATO believes you owe and often does not take into account any deductions that you may be entitled to. On top of this, an administrative penalty of 75% of the expected tax liability can be charged, which can then be increased to 95% for those with a pattern of non-compliance.
- You can sleep well at night: Overall, the benefit of simply knowing that your lodgements are up to date is one less burden to worry about in life. In the vast majority of cases, it’s never too late to get back in the good books with the ATO.
If you have any questions or require assistance with your outstanding lodgements, please don’t hesitate to contact our office.
