Tips For Doing Your Tax Return Late

Tips For Doing Your Tax Return Late
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Missed the deadline to lodge your tax return? You’re not alone: heaps of Australians forget every year to file by the October 31 deadline.

Whether you’re behind by just one year or several, don’t panic. There are things you can do to stay on the ATO’s good side: but don’t dawdle. The longer you wait, the higher penalty you can pay – and those can reach in the hundreds of dollars.

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Don’t panic if you get a letter from the ATO

If you’ve waited too long to lodge a return you may get a letter from the ATO containing the words “default assessment”. It will usually include an estimate for your income and the taxes that you owe.

Don’t freak out. The ATO sends these to everyone and they’re designed to get you moving.

Figure out how many you have to lodge

If you’re behind by one year it’s going to be a lot easier to manage, and explain, than if you have a history of missed lodgements. Figure out exactly how many years you’ve missed, and then determine whether you need to lodge a tax return for those years.

The way you figure out whether you need to lodge is if you earned under the tax-free threshold for that year. This year the threshold is $18,200, but it was lower in previous years.

Talk to an accountant or tax agent

Seriously – don’t try to do this by yourself. Lodging a late tax return is not as simple as using MyTax (the MyGov lodging system). Contact a professional who is in good standing with the ATO. Not only will they have knowledge about deductions and other concessions that could increase a refund, but they can negotiate with the ATO to reduce any fines that could apply.

Yes, it’s going to cost you some money. But considering the ATO might fine your thousands if you just leave it, it’s worth it.

You might want to contact the ATO

Ask your accountant or tax advisor about this one, but it could be worth contacting the ATO in the case of several missed years to let them know you’re on top of things. The ATO is much more lenient on folks who are proactive about obeying tax law, so even if you signify that things are underway you’ll be on the way to getting on their good side.

Gather all your documentation

First up, you’ll need payment summaries for every job you worked during the years of the missed tax returns. Employers are legally obligated to provide them to you.

If you don’t have them, you need to call them up and get another copy. If you can’t get copies your accountant or tax advisor can help you with estimating your income.

Then you need to find evidence of purchases that can help deduct rom your tax. Generally, anything you spend that is related to your employment, not reimbursed by your employer and relevant to the job at hand can be deducted, but there are all sorts of rules and regulations.

You can deduct up to $300 of expenses without receipts. But seriously, don’t lie – the ATO can still ask you about those purchases and the details thereof, even if you don’t have proof of them. If they suspect you’re fibbing or those deductions sit outside the realm of other people in your industry, they’re going to get suspicious.

Don’t freak out

Really! Don’t freak out. It may turn out that you’re owed a whopping big refund at the end of all of this. Just use this as an opportunity to remind yourself: the more you stay on top of your taxes, the easier it will be for you later down the road.