Tax deadline that could cost you $1050
PROCRASTINATORS have been put on notice as the October 31 tax deadline fast approaches, with those who fall foul of the tax man risking fines of up to $1050 - or worse.
According to H & R Block's director of tax communications Mark Chapman, Aussies could face serious penalties if they fail to lodge a tax return by the end of the month.
The punishment for overdue tax returns increases depending on just how late you are, with fines increasing by $210 for every 28-day period you're overdue.
"On November 1 you could potentially be fined $210 and 28 days later another $210 and so on, which keeps accumulating all the way up to a maximum financial penalty of $1050," Mr Chapman told news.com.au.
"If you still haven't lodged after that, the ATO will bring out the big guns and issue you an estimation of assessment where the ATO guesses your income and potentially prosecutes.
"The longer you leave it, the more the ATO will escalate the pain, so it's absolutely worth getting it done, particularly this year with a low to middle income tax offset."
Mr Chapman said around 10 million Aussies had already lodged their tax returns this year - up 11 per cent compared with the same time period in previous years.
That increase is largely the result of Prime Minister Scott Morrison's highly publicised low and middle income tax offset, which could be worth a maximum of $1080.
However, Mr Chapman said up to four million of us were still putting it off.
"If you're eligible you can get up to $1080, so that's a good incentive to lodge. It's quite a decent sum, although not everyone will get it," he said.
If you're worried about the October 31 deadline, there is a loophole - taxpayers who lodge through a tax agent instead of going it alone can take advantage of concessional extended deadlines that allow their agent to lodge a form on their behalf up to May 15, 2020 without incurring any penalty.
However, you will need to register with your agent and ensure your name is on the books before October 31, even if the actual return is lodged at a later date.
Mr Chapman said the best tax advice - now as always - was to report all your income, make sure you claim all deductions you're entitled to and don't try to claim those you're not, and to speak with a tax agent if you are unsure about anything.
"Don't leave it until the last minute - there's still two-and-a-half weeks to go until the final deadline, so if you start now you can reduce your stress," he urged.
He said Australians who had outstanding tax returns from previous years still had to lodge this year's tax return by the October 31 deadline, even if they were using a tax agent.
He said the same financial penalty was applied to each individual overdue return that was multiplied by the number of years outstanding.
Mr Chapman also shared some last-minute tax tips for five of Australia's most popular professions.
HEALTH AND SOCIAL CARE
• Uniforms, clothing that you use at work to protect your ordinary clothes like lab coats and aprons and protective clothing like non-slip shoes are all deductible
• So are conference expenses including travel, meals and accommodation costs - even when the conference is overseas
• Other things that can be claimed include professional subscriptions, the cost of meals bought while working overtime, agency costs and the use of your own car for work purposes
• Specific uniforms are deductible but regular clothes are not
• You can claim a proportion of home running costs if you complete work like staff rosters at home as well as any work-related courses and the cost of travel between stores
PROFESSIONAL AND ADMIN
• You can claim the cost of handbags or briefcases if you use them to carry work devices or documents
• Regular clothes can't be claimed, but profession-specific items like court robes and wigs can, as can lawyers' annual practising certificates, professional indemnity insurance, a proportion of home running costs if you work from home, and the costs of your work-related journeys - including parking, tolls and public transport
• The cost of entertaining clients isn't tax deductible, nor is the cost of club fees, even if it is used for networking and meeting clients
EDUCATION AND TRAINING
• Annual teacher registration fees, reference books or a professional library, prizes purchased to reward students, stationary and art supplies, teacher aids and depreciation on technology costing more than $300, like computers, laptops, tablets, mobile phones and printers, are all deductible
• So are conferences and courses and their associated costs, home office expenses if you work from home, and out-of-pocket excursion costs
CONSTRUCTION AND MANUFACTURING
• Deductible items may include any tools or other work-related equipment, the cost of insuring them and interest charged on finance taken out to buy tools and equipment, expenses for buying and maintaining a mandatory uniform with a company logo, and trade union fees
• The cost of renewing any professional licences, registrations or subscriptions are claimable, as is the cost of self-education courses run by a university or TAFE, and some overtime meal expenses