The Australian Taxation Office (ATO) is concerned that with less than one week left to lodge, up to 4.8 million Australians are leaving their tax return to the last minute. Taxpayers must either lodge a self-prepared return or be a client of a registered tax agent before the 31 October deadline.
More than 8 million Australians have already lodged their returns, but this means that up to 4.8 million are yet to lodge. “This could be due to a number of reasons but it is important for all Australians to make sure they are on top of their tax affairs,” said Assistant Commissioner Kath Anderson.
The most common reasons people lodge late or don’t lodge returns are that they:
- Didn’t realise they needed to lodge – often retired people and low income earners. Some people don’t realise that even if they earn less than the tax-free threshold, they must still lodge a return if tax was withheld from their payments
- Are expecting a large debt, for example a taxpayer might have sold a property, and incorrectly assume that if they don’t do their return, they won’t have to worry about a capital gains tax debt
- Ran out of time, which usually happens because they are not well organised and cannot find their documentation
- Are behind in their lodgments and putting off lodging because they are worried about penalties
- Expecting a small refund but don’t think it is a big priority.
“Of course, taxpayers are entitled to wait to the last minute to lodge. But we are concerned that taxpayers who do wait until the deadline rush their return and make errors while lodging,” Ms Anderson said.
Common errors taxpayers make include leaving out income and claiming deductions they are not entitled to because they haven’t been able to find all the information they need to correctly calculate their claim.
“We are urging all taxpayers to take the time to check their claims. We have seen some taxpayers simply recycling the claims made last year without checking.
“The ATO has already identified 26,000 taxpayers who have claimed deductions for travel to rental properties despite recent changes to tax laws. From 1 July 2017, investors cannot claim travel expenses relating to inspecting, maintaining or collecting rent for a residential rental property as deductions unless they are carrying on a rental property business or are an excluded entity.
“Rental property investors should check if they fall into one of these exceptions before they lodge and claim for rental travel. If they have already lodged and made a mistake, we encourage them to lodge an amendment,” Ms Anderson said.
