As the end of the financial year approaches, Australians are bracing themselves for the usual tax obligations.

However, this year, there's an added sting in the tail for those who drag their feet.

Hidden within the federal budget is a detail that could result in hefty fines for procrastinators who fail to lodge their tax returns on time.

Starting from 1 July, the government has decided to turn the screws a little tighter by increasing the cost of a Commonwealth penalty unit from $313 to $330.

This 5.4 per cent hike is initially buried in the fine print of the mid-year budget and is pending parliamentary approval.

The government decided to increase the Commonwealth penalty unit from $313 to $330. Credit: Shutterstock

Penalty units are the standard measure used to calculate fines for a range of offences, including failing to lodge tax returns by the due date. The fines can accumulate significantly for each delay period.

Now, let's talk strategy to avoid these fines.

The Australian Taxation Office (ATO) opens the gates for tax return lodgments on 1 July each year.

However, they advise waiting until the end of July to submit your return, as rushing in early could mean missing out on crucial information that could slow down your return.

ATO Assistant Commissioner Rob Thomson warned that lodging too early can lead to mistakes.

‘We see lots of mistakes in July where people have forgotten to include interest from banks, dividend income, payments from other government agencies and private health insurers,’ Thomson said.

For most taxpayers, the ATO will automatically pre-fill much of this information in their tax return by the end of July.

The deadlines for filing your tax return vary.

If you're going it alone, you have until 31 October to lodge.

However, if you're using a professional tax agent, you need to be on their books before 31 October. Depending on your circumstances, the actual deadline for lodging can be extended as late as May 15.

If your tax return is even a day late, you could be fined $330. For every additional 28 days your return is overdue, another $330 fine can be applied.

You can be fined up to five times, which means the maximum penalty could reach a whopping $1,650.

Key Takeaways

• The Australian government will increase the cost of a Commonwealth penalty unit from $313 to $330, which will affect the fines for late tax returns.
• Penalty units determine the fines for various offences, including the late lodgment of tax returns which can escalate with each missed deadline.
• Taxpayers are advised to lodge their tax returns after the information becomes pre-filled by the end of July to avoid mistakes.
• Taxpayers lodging their own returns must do so by 31 October, while those using a tax agent have varying deadlines but must register with the agent by October 31.

Do you have any tips for staying on top of your tax obligations? Share your stories in the comments below!

 

[mylittletibbies]

That seems a reasonable amount of time to me. If you can't get your act together in that amount of time then I think the fine is fair enough.
Otherwise some people just never get around to it.

 

[Cheezil]

A shame the 500,000 people waiting for Centrelink benefits (other article this newsletter) can't slap a fine on the stinkin govt for late Clink payments (these people suffer badly on low incomes & struggle to put food on the table or a roof over their heads & keep warm, etc, but this is not what happens if politicians look like missing out on having to wait for their wages- that just NEVER happens (tho it should so they get a better understanding of how low incomes or relying on these Clink payments feel!

 

[Kevin. A.]

We do our returns online through the tax office and have never had any issues. We have used a tax agent in the past until I was stung by a dodgy agent one year.
Yes, there are some dodgy tax agents out there ready to fleece the unwary.
I have found claiming is pretty straightforward for a standard return.
There is lots of info on what you can and cannot claim and if in doubt you can ring the tax office or pay a tax agent.
I know these tax agents always tell you they can let you know about all of things you can claim, and you could be missing out.
In the end most claims are pretty standard unless you are running your own business/ self-employed/ rental assets/ super otherwise you are just paying the tax agent to fill in a form with standard set of questions, that you could have filled out and saved the cash.
I know you can claim tax agent fees, so why worry. However, as far as I know you can only claim the fee at the end of the following financial year.
Our last few returns were back within two weeks after lodgment, although we do wait until the end of July, then we miss the early bird rush.
Things may change later though when I finally retire in few years' (67 and still working).
Not sure about tax obligations on super, pension and assets (home) after you retire.
I will have to get some info from tax office on that query.

 

[LeahI]

Get some of those ATO workers onto the Centrelink/Medicare backlog

 

[Gsr]

Typical, residents get fined for having their tax in late, governments can keep centrelink recipients waiting forever to get their benefits but that is ok. They should have to pay interest at the current mortgage rate on the back money they finally pay if they ever get their act together and approve a benefit. There needs to be some penalty if claims are not approved and payments started within two weeks, too many people are spiralling into mental health and other health issues, resorting to criminal activities as they have no money for any of life’s necessities.

 

[Blackness]

I was surprised to get a discount by paying my tax early. I had a bill, and had until March to pay it. Paid half pre Christmas & the balance in February. Received an email, & refund, in April/May, for paying early.

 

[Chook]

Sure. Anyone got a formula how to punish the Political parties who promise the world (Look at me and I promise, Cross, my fingers) no matter what they do with Our Heavy Burdened Wages and Pensions we finally get, after the pollies get their cut. And, I don't know why we put in Tax Forms. The Government Agencies know exactly where are HARD EARNED MONEY goes. Remember Pollies don't have any many, it is ours they burn on their jollies and promises.

 

[Ezzy]

Not like the old days when my father claimed on school education fees, annual S.G.I.O. accident insurance for us kids, Council rates & anything else you could think of. Taxpayers are now screwed so they can claim less of nothing & receive the same as a Tax Return Refund.