Income Tax Returns Overdue?
Over the last few years Wallace Partners have helped a lot of people get up to date with their tax affairs. There is often a feeling of stress and anxiety when it comes to dealing with the ATO and it can be difficult to know where to start.
When people first come to us to discuss how they can go about getting their tax in order the conversation usually starts with I am so embarrassed or You are going to think I . Please rest assured there is no judgement, you are just late and need some help and all we are interested in is helping you.
If your company, trust, self-managed superannuation fund or individual tax returns are late, you should get them up to date, for a few reasons, not just because of the potential of ATO fines.
Some Good Reasons for getting your tax affairs up to date:
Get the monkey off your back and get a good nights sleep: Taking the first step and engage as your tax agent. We can then talk to the ATO for you, discuss a timeframe with the ATO to get you up to date and then start working towards it. Salary and Wage tax returns can be lodged within 24 hours for you, for more complex affairs and business returns we can negotiate extended dates with ATO to ensure your tax return are not only lodged efficiently but accurately too with the best possible tax result.
Finance Applications: If you are buying a new home or first home, a car, and caravan, boat or investment property and do not have your latest tax returns available it can be difficult to get a loan, or a higher interest rate may be charged, costing you money.
Financial Certainty: For business owners and contractors in particular, if you have not been keeping track of your profit and taxable income, it can be difficult to budget and manage your cash flow and plan for your financial security. Getting your tax returns up to date can give you more value than just keeping the ATO happy. It can be an opportunity to plan, grow and know more about your financial security.
Human Services (Centrelink Benefits): Late Tax returns could be affecting your family tax benefit and child care rebates.
Child Support: Have your tax returns up to date with the most recent and accurate information. Are you paying too much (or too little) in child support based on out of date information.
Tax Refunds: You may have a tax refund(s) owing to you, why leave it with the ATO?
Tax Bill? If you end up in the position where you have a tax bill, we can negotiate a payment plan for you with the ATO. Not having the funds to pay an expected tax bill should not be a reason for not lodging your returns. In fact the ATO will generally deal with you more favourably if you come clean, lodge those returns and enter a payment arrangement, rather than ignoring the problem and not lodging those tax returns.
Can the ATO fine me? What are the fines and penalties?
You may be worried about what the ATO can do if you have late tax returns and lodgement, here is some general information for you:
- Firstly, please know we can apply to the ATO on your behalf to remit penalties and interest. If you have a tax bill we can negotiate you time to pay, often over 2 years.
- Failure to Lodge Penalties – Failure to lodge (FTL) on time penalty is an administrative penalty that may be applied if you were required to lodge a return, notice, statement or other approved form with the ATO by a particular day, and did not do so.
The amount of the penalty is dependent on the size and type of entity and increases the longer the tax return or business activity statement is outstanding.
The penalties can be levied on each tax return or business activity statement outstanding.
For smaller entities and individuals the penalty is $180 for every 28-day period or part thereof that the returns remain outstanding up to a maximum of $900. For larger entities the penalty can be $900 up to a maximum of $4,500.
The ATO may issue a default assessment warning letter. This letter will summarise the income on which the default assessment may be based. The letter will also tell you the date by which you must lodge the overdue return if you want to avoid being issued with a default assessment.
You can still submit a late tax return if you do not have all of your Payment Summaries, documents and receipts!
Business owners and contractors:
We have plenty of tools available to help make it as easy as possible for you to gather the information necessary. We will work with you and provide guidance and an action plan on getting you up to date. Give us a call on 07 55263 888 to get started.
Its easier for salary and wage tax payers:
The ATO collects information about your income from banks, employers, government agencies and other parties. With your consent Wallace Partners can help you with the ATO by checking what tax returns you have outstanding, and by getting reports from the ATO on what information they have available. We can generally get the following information for you:
- Payment Summaries
- Interest Income
- Dividend Income
- Managed Funds Investment Income
We can then work with you to ascertain what deductions may be relevant to you, and assist you to work out how to locate this information there are some deductions you can claim without receipts.
Business owners and contractors:
We have plenty of tools available to help make it as easy as possible for you to gather the information necessary. We will work with you and provide guidance and an action plan on getting you up to date.