What Happens If You Don’t Lodge A Tax Return?
We get it, life happens. Sometimes, filing a tax return isn’t at the top of our to-do list. Whether you were travelling, dealing with health issues, or simply caught up in the whirlwind of daily life.
But the Australian Tax Office (ATO) keeps a watchful eye.
Tax season brings a sense of dread, paperwork, and confusion. However, for those who earn more than the tax-free threshold. It is a mandatory responsibility to lodge a tax return.
In this article, we’ll explore the consequences of ignoring this essential financial duty. Tax Accounting Australia will explain what happens when you don’t lodge your tax return and the steps to take through the aftermath. And what you can do to get back on track.
Do I need to lodge a return?
Earning More Than the Tax-Free Threshold
If you earn more than the tax-free threshold. Which currently stands at $18,200 as of 2023. It’s mandatory to file a tax return for that financial year.
Earning Below the Threshold
But what if you earned less?
Meaning your income is not tax ready. Even if you earn below $18,200 no tax was deducted from your wages. You still need to send a ‘non lodgement advice‘ to the Australian Tax Office (ATO) to keep your tax lodged record clean.
When can I lodge my tax return?
If you’re doing it on your own, you must submit your tax return by 31 October each year. For 2024, you need to do it by 31st October 2024.
Why Lodge a Tax Return Every Year?
For many reasons. People might put off filing their tax returns.
Whether it’s a busy schedule, living overseas, or finding the process too complicated. Avoiding filing tax returns can lead to serious outcomes.
It’s important to submit your BAS (Business Activity Statement) and pay any owed amounts on time.
You can report your GST, PAYG instalments, PAYG withholding tax, and other taxes through various methods. You can easily lodge BAS online. It’s quick, secure, and offers benefits like a potential 2-week deferral, faster refunds, and error prevention.
You can use different online ato portal for agents, like myGov for individuals, Online services for businesses, or SBR-enabled software linked to accounting tools.
What happens if I don’t lodge my tax return?
Skipping the tax return is no joke. Missing the tax return will land you in hot water.
Brace yourself for the Failure to Lodge (FTL) penalty. FTL fine is calculated daily after the tax return due date. It’s a scale, so the longer you delay, the higher the fines. Late interest also tags along, especially if there’s a tax liability.
Pro Tax Tip: If a summons is knocking at your door, consult a tax accountant ASAP. They’re your partners in solving the strict consequences of this financial misstep.
Will I be prosecuted if I don’t pay my tax?
If you skip filing your tax return. Trouble will indeed knock on your door.
What kind of trouble, you ask?
Think fines, ato audit penalties, and interest charges. And even the scary possibility of facing prosecution or jail time.
So, what really goes down if you forget to lodge your tax return?
Well, two things will happen when you fail to file your tax returns.
After-Effects of Ignoring Your Tax Responsibilities
A. Failure To Lodge (FTL) Penalty
Failure to file your tax return may result in a Failure To Lodge (FTL) penalty. Failure to lodge (FTL penalty) isn’t just a slap on the wrist. It’s an offence under the Taxation Administration Act.
The penalty for late tax return increases at the rate of one penalty unit every 28 days after the ATO tax return due date. Up to a maximum of five penalty units.
B. Late Interest Charges
Late interest charges apply if there is a tax liability. Making it necessary to address overdue tax returns promptly.
C. Legal Consequences
Failure to lodge a tax return is considered an offence under section 8C of the Taxation Administration Act 1953.
The ATO gives you a chance to clear your debt. But if you don’t meet the terms. The ATO may prosecute.
Imposing a maximum penalty of $8,500. Or a jail stay for up to 12 months.
D. Audit Risks for Late Filers
Late lodgers may find themselves under ATO inquiry. Increasing the risk of audits.
Working with professional services like Tax Accounting Australia can minimise these risks. And provide support in case of ATO inquiries.
Seek Professional Advice
Luckily, there’s a way out if you’ve missed the tax return.
Your first big move? Reach out to a certified tax accountant.
They are well-versed in tax law and can guide you through the mess and handle all the paperwork.
If you are facing a summons. Getting help and advice from a tax accountant is necessary. Organizations like Tax Accounting Australia can guide you through this challenging process. Working the best possible outcome.
What if I can’t pay my overdue tax?
ATO Provide Assistance
The ATO isn’t heartless. If you’re truthful and accurate with your tax return. They might cut you some slack. Payment plans and remissions on penalties are on the table.
The ATO can be reasonable and offer assistance with a payment plan. As well as potential remissions (cutbacks) on penalties and interest charges.
Learn about the maximum penalty and situations where it might be decreased. Such as natural disasters or serious illness.
The ATO gives you a chance to pay up. But prosecution is on the table. If you still don’t comply.
Consult a tax accountant to explore these options fully. A chat with your tax accountant could work this out to ease the financial burden.
What happens if I get a default assessment?
In this situation, the ATO sends you a default tax assessment notice. Guessing your income. It might seem too high. Like an overinflated balloon.
But don’t worry, you can challenge it.
Just be prepared to show proof. Keep in mind. An audit could be on the way.
What Happens if you don’t lodge your tax return?
External collection agencies
The ATO hires external collection agencies for overdue lodgements. It starts with a friendly reminder. But if you ignore it, stronger actions are on the horizon. While it won’t bruise your credit rating initially. Prolonged silence may change the scenario.
If I haven’t lodged my return, what should I do next?
Feeling the panic set in?
Lodged tax return immediately to avoid interest and penalties. Consult a Tax Accounting Australia tax agent—they will sort out all the tax-related work for you.
Fear not, your tax agent is your shield.
Take Action: Seek Professional Help
When in doubt, consult a tax professional. Tax Accounting Australia can simplify the process of lodging late tax returns.
From obtaining pre-filled information to working with you on record-keeping. They guide you through the web of tax complexities. Make sure your journey ends on a positive note.
See all services intended to make the process painless.
Income Tax Professionals: Tax Accounting Australia specializes in tax law. Making sure your overdue tax returns meaning:lodged are handled with expertise.
Contact us now for a stress-free solution.
I Forgot My Tax File Number: What Can I Do?
Here’s what to do:
Check the following for your TFN.
- Past tax returns
- Your income statement
- Letters from the ATO
- Your superannuation account
Still Can’t Find Your TFN?
Take these steps:
- Contact the tax agent who did your last tax return. They should have your TFN on record and can help you find it.
- If you didn’t use a tax agent, call the ATO at 13 28 61. They’ll ask questions to verify your identity, and you might need to provide a voiceprint for future calls.
Forgetting to lodge a tax return is not just about paperwork. It has significant financial and legal consequences.
Life’s twists and turns sometimes lead to missed tax returns.
But fear not.
Stay informed, and take proactive steps to catch up. And take advantage of professional services to ensure compliance with tax duties. Submit non lodgement advice 2023, if you earn below taxable income.
With timely action, professional guidance, and honesty. You can go through the outcomes. Remember, active steps today can save you from financial issues tomorrow.
Hire Tax Accounting Australia
Why stress alone when you’ve got the Income Tax Professionals on your side?
Our tax-savvy accountants specialize in tax law. They ensure a smooth process for late filers. No matter your situation. We offer remote, after-hours, and email appointments.
Contact us now for a positive tax filing experience.
Tax Return FAQs
- Is it too late to lodge a tax return if I missed the deadline?
It’s never too late to submit your tax return. But you need to act quickly. If you missed the deadline. Tax Accounting Australia can help you catch up on overdue returns.
- What if I don’t have all the necessary income information for past years?
If you’re missing income details. Tax Accounting Australia can help by getting information from banks and employers to fill in the gaps.
- Can I appeal a default assessment issued by the ATO?
Yes, you can appeal a default assessment. But you must provide evidence of your actual tax liability. You need to lodge an objection. Explain in detail why you disagree and provide proof.
- I haven’t done my tax for 5 years Australia?
If you haven’t filed your tax return for several years now. The ATO might estimate your income with a default assessment. Tax Accounting Australia can help you catch up and make the process smoother.
- What are the consequences of not lodging my tax return?
Not filing your tax return can lead to penalties, interest charges, and even legal action. Including fines or imprisonment.
- How can a tax agent help if I receive a summons?
A tax agent can offer important advice to get the best outcome in legal situations.
- Is it worth consulting a tax professional for overdue returns?
Yes, a tax professional can handle the complexities, reduce penalties, and guide you through the process.
- What if I can’t afford to pay my overdue tax?
The ATO may provide payment plans, and a tax agent can help negotiate reduced penalties, making it easier for you financially.