When the end of the financial year comes around, it’s easy to want to stick your head in the sand. People often ask us “do I really need to lodge a tax return?” Unfortunately the simple answer is yes.
All people living in Australia must lodge a tax return each financial year with the Australian Taxation Office. This is still the case even if you didn’t earn any income during the course of the financial year.
If you’re wondering ‘how to lodge a tax return’ we can help with that too. But for now, lets take a look at the realities of lodging a tax return for 2017.
What kind of penalties are there if I don’t lodge a tax return?
The ATO can impose financial penalties for failure to lodge your tax return on time. They can range in severity depending on the case. On top of this, the ATO have the ability to charge interest on any outstanding monies, including outstanding penalties.
What should I do if I have multiple tax returns outstanding?
Contact Quax for a ‘free tax health check’ where we’ll be able tell you exactly how many years you are behind and which years they relate to. Alternatively, you can call the ATO directly and request this information from them once you’ve confirmed your identity. Unfortunately, the ATO is in high demand around this time of year, so wait times can be an issue.
What is the earliest the ATO is known for taking action on these penalties?
Technically the ATO can commence action one day after you fail to lodge a tax return on time. However, the ATO will generally give you every chance to lodge a tax return ASAP if you happen to be late. Typically, this will include writing to you to notify you of your outstanding returns before they impose any penalties.
If I don’t lodge a tax return, do the penalties get worse the longer I leave it?
Ultimately, yes. The longer you leave your tax return outstanding the greater the penalties on the late lodgement will become. Additionally, the greater the potential interest charges on any outstanding monies will become. The Australian Taxation Office general interest charge rates as of the quarter ending September, 2018 are 8.96% annually.
Every individual in Australia must lodge a tax return at the end of each financial year. The ATO can apply penalties if you fail to lodge a tax return. The longer you leave it the worse those penalties can become. To get your ‘free tax health check’ simply email us at firstname.lastname@example.org or call us on 0421 633 710.