TAX time ends this week, and if you still haven’t lodged yours by now there are a few ways to avoid potentially painful penalties.
The Australian Taxation Office’s deadline for personal tax returns is October 31, but people can get extensions up to May 2019 if they use a tax agent.
However, they must be on the agent’s books before November, says ATO assistant commissioner Kath Anderson.
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A potentially easier and cheaper alternative is using the ATO’s online myTax lodgement system, which provides pre-filled data of people’s wages, deposits, share dividends and other income — meaning all many have to do is check it’s correct and add any deductions.
Ms Anderson said myTax was “quick, easy and safe” and could be competed on a computer, tablet or smartphone.
“Over three million people have already lodged using myTax this year — more than 50 per cent did their return in less than 30 minutes and 25 per cent did their return in less than 15 minutes,” she said.
Ms Anderson said people who delayed doing their tax because they owed the ATO money still had the same date to pay as everyone else — November 21. “We don’t want people to avoid lodging because they think they have a debt.”
Tax specialist and Deakin University associate professor Adrian Raftery said people who were owed a refund were unlikely to suffer late lodgement penalties from the ATO.
“However, if you do owe the taxman the ATO has the capability to apply two forms of penalties — a late lodgement penalty of $210 per month late up to five months, and interest on late payment of 8.77 per cent per annum,” Dr Raftery said.
About 84 per cent of Australians receive a tax refund, averaging $2500. People’s Choice Credit Union spokesman Stuart Symons said people should consider using it to give themselves a step up.
“Locking your cash away in a term investment may give you the space to think clearly about your objectives,” Mr Symons said.
Setting the money aside to reduce the financial pressures at Christmas, or investing in further education were other ways to make tax refunds work harder, he said.
Mr Symons said paying down debt provided breathing space and could deliver a financial bonus. “If you’re on top of your credit cards, then look to your home loan. Putting in $1000 from your tax refund today can cut almost $1650 from your home loan over the next 10 years.”
Dr Raftery said paying off a credit card could save 20-24 per cent interest, while lower and middle income earners could use the superannuation co-contribution scheme to lock in a 50 per cent return on their money.
Original article published here on 28 October 2018 in The Advertiser.