I’m going to throw around some words:
These words are all meant to instil fear and hustle into you. If Paul – the father of revered wonders like our more than $2 trillion super system – didn’t do his taxes and got caught, you could too.
Yes, it’s tax time. Not the June 30-time, the potentially even more painful time.
Because many of us love that much-needed refund that serves as the fruit of our lodgement labour, I’m here to remind you to lodge your tax return on time (October 31 people. SAVE THE DATE. Set an iCal reminder. Get your mum to hassle you – she will most willingly oblige, I promise) and some of the very serious ramifications that come with…missing the deadline.
This time of year should not be a surprise to you. It comes around every year. However, if for some reason – too busy, overseas, your dog ate your receipts, you were three seasons deep into Game of Thrones and just couldn’t cope post the “Red Wedding” – you haven’t got around to it and fail to by the end of October, our good friends, the Australian Taxation Office, can apply a number of penalties, namely to your bank account.
Let me talk you through how this may play out.
Firstly, the ATO will probably reach out and remind that your tax return has not been lodged by October 31. If nothing changes, you may be issued a Failure To Lodge (FTL) penalty in the mail. If you’re a millennial like me and your address is still your childhood home despite you having moved out five years ago, your mum will probably open it.
Then, you’ll get a series of missed calls from your mum, and when you eventually pick up, you’ll be forced into a very uncomfortable conversation about how you’re an adult now etc etc.
For individuals, the fine you’ll receive is calculated on penalty units of 28 days and part thereof that your document is overdue. Currently, the penalty unit value is $210 and the max you can be fined is $1050.
Oh, and add interest and penalties that will be charged on the amount of any outstanding tax you may also owe.
That’s the minimum folks. If you’re found to be outright avoiding tax, a whole new range of penalties can apply, both financial and legal, and you’ll probably have to move back home.
Unlike some things, I will never, ever, ever pretend to know what I’m talking about when it comes to complex money stuff. But even I know that doing your tax within four months of June 30 is a simple way to avoid that clammy feeling many of us know too well.
You can do it online, or visit an accountant or tax agent as they generally have extended timeframes for lodgement. So set aside some time, make an appointment, today.
Oh, and don’t try and pass off dubious deductions: ATO boss Chris Jordan is watching, trying to snare back some of the more than $22 billion claimed for work-related expenses in 2014–15. He reckons the amount over claimed in that year alone could have been more than $2.5bn. And that’s just deductions for work-related expenses.
You’ve been warned.
By Michael Bennet
Editor, Westpac Wire