Missing your tax deadline can cost
The ATO is warning people not to delay returns,
TAX time ends this week, and if you still haven’t lodged yours by now there are a few ways to avoid potentially painful penalties.
The Australian Taxation Office’s deadline for personal tax returns is October 31, but people can get extensions up to May 2019 if they use a tax agent.
However, they must be on the agent’s books before November, says ATO assistant commissioner Kath Anderson.
A potentially easier and cheaper alternative is using the ATO’s online myTax lodgment system, which has pre-filled data of people’s wages, deposits, share dividends and other income – meaning all many have to do is check it’s correct and add any deductions.
Ms Anderson said myTax was “quick, easy and safe” and could be completed on a computer, tablet or smartphone.
“Over three million people have already lodged using myTax this year – more than 50 per cent did their return in less than 30 minutes and 25 per cent did their return in less than 15 minutes,” she said.
Ms Anderson said people who delayed their tax because they owed the ATO money still had the same date to pay as everyone else – November 21.
Tax specialist and Deakin University associate professor Adrian Raftery said people who were owed a refund were unlikely to suffer late lodgment penalties from the ATO.
“However, if you do owe the taxman, the ATO has the capability to apply two forms of penalties: a late lodgment penalty of $210 per month late up to five months, and interest on late payment of 8.77 per cent per annum,” Dr Raftery said. About 84 per cent of Australians receive a tax refund, averaging $2500.
People’s Choice Credit Union spokesman Stuart Symons said people should consider setting the money aside to reduce the financial pressures at Christmas. Investing in further education was another way to make tax refunds work harder, he said.
Mr Symons said paying down debt provided breathing space and could deliver a financial bonus.
“If you’re on top of your credit cards, then look to your home loan,” he said.
“Putting in $1000 from your tax refund today can cut almost $1650 from your home loan over the next 10 years.”
Dr Raftery said paying off a credit card would save lots on interest, while lower income earners could use the superannuation cocontribution scheme to lock in a 50 per cent return.