TAX TIME: Only days to go to lodge return
IF YOU'VE been putting off lodging your tax this year, you're not alone.
The Australian Taxation Office (ATO) is concerned that with less than one week left to lodge, up to 4.8 million Australians are leaving their tax return to the last minute. Taxpayers must either lodge a self-prepared return or be a client of a registered tax agent before the October 31 deadline.
And figures collected by the ATO show that NSW and Queensland people are amongst the slowest to lodge.
NSW comes in last of all the eight states and territories, with only 72 per cent of taxpayers having lodging their returns, while Queensland comes in sixth with 78 per cent. Tasmania tops the list with 93 per cent lodging their returns.
There are still up to 4.8 million taxpayers that are yet to lodge.
"This could be due to a number of reasons but it is important for all Australians to make sure they are on top of their tax affairs," said Assistant Commissioner Kath Anderson.
The most common reasons people lodge late or don't lodge returns are that they:
- Didn't realise they needed to lodge - often retired people and low income earners. Some people don't realise that even if they earn less than the tax-free threshold, they must still lodge a return if tax was withheld from their payments
- Are expecting a large debt, for example a taxpayer might have sold a property, and incorrectly assume that if they don't do their return, they won't have to worry about a capital gains tax debt
- Ran out of time, which usually happens because they are not well organised and cannot find their documentation
- Are behind in their lodgements and putting off lodging because they are worried about penalties
- Expecting a small refund but don't think it is a big priority.
"Of course, taxpayers are entitled to wait to the last minute to lodge. But we are concerned that taxpayers who do wait until the deadline rush their return and make errors while lodging," Ms Anderson said.
Common errors taxpayers make include leaving out income and claiming deductions they are not entitled to because they haven't been able to find all the information they need to correctly calculate their claim.
"We are urging all taxpayers to take the time to check their claims. We have seen some taxpayers simply recycling the claims made last year without checking.
"The ATO has already identified 26,000 taxpayers who have claimed deductions for travel to rental properties despite recent changes to tax laws. From 1 July 2017, investors cannot claim travel expenses relating to inspecting, maintaining or collecting rent for a residential rental property as deductions unless they are carrying on a rental property business or are an excluded entity.
"Rental property investors should check if they fall into one of these exceptions before they lodge and claim for rental travel. If they have already lodged and made a mistake, we encourage them to lodge an amendment," Ms Anderson said. For more information, visit ato.gov.au/rentaltravel
The ATO has also announced that it will be using sophisticated data analytics to assess a range of other deductions and work-related expenses. Remember that when making a claim, you must follow the three golden rules:
- You must have spent the money yourself and not been reimbursed
- The claim must be directly related to earning your income; and
- You need a record to prove it.
With only one week left to lodge your own return, Ms Anderson urged taxpayers not to stress. The majority of the 3 million taxpayers who have already lodged via myTax have taken less than 30 minutes to do their return. But if you are not preparing your own return, make sure you contact your agent before 31 October.
"If you lodge after the deadline, you might incur penalties. The penalty for failing to lodge is $210 for every 28 days that your return is overdue, up to a maximum of $1,050. So even if you miss the deadline, get your return in as quickly as you can or contact us if you are having difficulties
"And remember, if you think you've made a mistake or forgotten to include something in your return, it's easy to make an amendment. You can do so by either accessing our online services using your myGov account or by contacting your agent," Ms Anderson said.
For information about the due date, visit ato.gov.au/lodgeonline