As individuals, we have certain tax obligations depending on our circumstances. This section looks at why you need to maintain compliance, whether this is to give yourself peace of mind, that good feeling of finishing a task or to avoid a fine. Here are the main three reasons why you should become tax compliant:
To avoid being fined
If you lodge your tax return late and fail to meet the deadline, you may have to pay a late lodgement penalty.
This amount is calculated by reference to penalty units. The value of a penalty unit changes from time to time. One penalty unit is currently equal to $210. The penalty amount accrues at one penalty unit for each period of 28 days (or part thereof) after the lodgement due date, capped at a maximum of five penalty units.
The ATO does follow people up who have outstanding tax returns, so it is important that you lodge all late returns as soon as possible. If you're unsure whether you have any outstanding tax returns, reach out to our support team to find out here.
To be eligible for extensions
Being tax compliant is also important to be eligible for extensions to lodge your income tax return. If you’ve lodged your past tax returns on time, at the ATO’s discretion, you may be able to defer your income tax return lodgement and payment by 6 months.
If you are unsure whether you have the extension, send us an email here.
To potentially receive a tax refund!
The average tax refund for Australians in 2018 was $2,727, so it is often worth spending that time to complete your return.