Income tax returns are usually lodged every year (the 31st of October for self-lodging individuals and the 15th of May for those who use an accountant to submit their return). Not everyone is able to follow the schedule, however. Some of them may:
- Have had too many things on their plate to take care of things,
- Were overseas when the deadline expired, or
- Found the process too intimidating.
Whatever the cause for the delay, if you’re one of these people, it’s in your best interest to settle any outstanding tax returns. Not only will it take a load off your shoulders to clear this financial task; you will also avoid incurring further late or overdue penalties from the ATO.
Failure to Lodge on Time Penalty and Remissions
Depending on your standing with the ATO, you could be given a penalty for any late or outstanding returns. The standard penalty is usually $222 for every 28 day period or part thereof that the return is late to a maximum of $1,110 or 5 months.
What if I continue to miss lodging my returns?
Continued delinquency will lead to the ATO issuing a formal default assessment warning letter if it doesn’t pursue legal action outright. In the event that the agency opts to go the default assessment route, the ATO will include an estimate of your income for the missing year.
Don’t think that having the agency do your tax returns for you is an ideal arrangement. You’ll most certainly get estimates that are not to your favor — since the ATO won’t include most deductions your business is entitled to in the assessment, you’ll be looking at figures much higher than they could have been.
Can I have my failure to lodge on time penalty waived?
It’s possible to get the ATO to waive your existing penalties. It comes with steep conditions to ensure that it only forgives outliers or those who have reasonable explanations for missing the lodging deadline, such as:
- Medical emergencies,
- Not having access to crucial tax preparation documents, or
- Other compelling personal reasons.
On the other hand, the ATO is more likely to apply a penalty when the filer is a repeat offender:
- More than one return outstanding
- Poor lodgement history
- Has other cases related to tax law non-compliance
To have your sanctions waived, you’ll have to lodge a remission of penalty, which could come in the form of a reduction (partial remission) or a cancellation (full remission). The request covers situations like failure to lodge documents on time and meeting other tax obligations.
Submitting a Late Income Tax Return
It’s within the realm of possibility to submit a late income tax return on your own. All it takes is a little time, patience and filing the right documents. There’s no guarantee that it will be a painless experience, though, especially when you aren’t familiar with the process.
A much better option would be to seek assistance from Your Finance Department, an outsourced bookkeeping and financial service provider. Out tax specialists in Brisbane can help you check your lodgment status with the ATO and prepare the necessary documents to clear your outstanding returns.
You don’t have to fall behind on your tax returns. Book an appointment with us today.
