Procrastinating about taxes is a yearly problem for many Australians.
That has a bunch of down-sides including, thoughts about “taxes” dancing in the back of our minds, for most of the year. Stressful! And really, unnecessary.
With the tax deadline looming (31 October), the window for putting off your tax return is closing in.
At this time of year, more than 65% of Australian taxpayers have already lodged their tax returns, leaving some taxpayers still to lodge.
Tax time can be a stressful and dreaded task on the ‘to do’ list. Many of us would rather bury our heads in the sand than sort through a year’s worth of crumpled receipts and complicated tax rules. It’s just human nature that our brains are wired to avoid painful situations.
While the temptation to delay the inevitable to the last minute is real, so are the consequences of unnecessary stress, forgotten deductions and ATO penalties.
If you’re one of the 2 in 5 Aussies who still need to lodge their tax return, don’t worry! You’re not alone and there’s still time to beat your tax time procrastination.
Top 10 reasons for delaying your tax return
We’ve wrapped up the top 10 reasons why Australians procrastinate at tax time, and the truth behind these excuses standing in between you and your refund. (Or, is risking some ATO troubles…)
1. If I ignore my tax, it will go away.
Sorry to break it to you, but tax is something that will never go away. Every tax return stays on your file with the ATO, forever. Ignoring your taxes will only make the situation harder for yourself down the track. And the longer you wait, the more chance you have of incurring ATO fines and interest charges – or even, nasty, repetitive phone calls from ATO collectors.
The only way forward is to take action now. And when it’s all done, what a relief!
2. I can’t find my income statement (PAYG).
If you’ve lost your PAYG payment summary or group certificate, a qualified tax agent can find it for you. Did you know that tax agents like Etax can retrieve your tax records directly from the ATO’s database? In fact, tax agents can find income records for you, including your salary, bank interest and government agency income like Centrelink.
Alternatively, contact your employer or payer directly to request a copy of your missing PAYG.
3. I can’t find my receipts.
Are you procrastinating because you don’t know where to start to find all your receipts?
While the obvious advice is to use a mobile app that lets you snap photos of your tax receipts and store them in one convenient place, if you didn’t do that this year – don’t worry! There are some other easy ways you can remember and track down your work-related purchases, like checking your:
- bank and credit card statements – these transactions can help jog your memory for certain work-related expenses,
- calendars – your work calendar may remind you of car expenses and travel expenses,
- photos – check your phone for any pictures of receipts or things you bought,
- emails – search for things like ‘invoice’ and ‘receipt’ in your inbox for missing digital receipts.
Remember, if your total claim for work-related expenses is more than $300, you must have written evidence to prove your claims. Keeping good records from the start will ensure you don’t pay more tax than necessary.
4. I don’t know what tax deductions I can claim.
Knowing what you can and can’t claim for your job can be daunting, especially if you’re thinking about lodging your taxes yourself. That’s why about 70% of Australians use a tax agent to lodge their tax return – they get qualified accounting advice, and someone else makes it all easier.
Better yet, an online tax agent like Etax can automatically suggest the deductions you could claim once you’ve added your occupation and basic details. For lots of people, that sparks the memory and improves the tax refund.
You could also look for tax checklists that give you a great list of deduction suggestions to consider for your job.
5. I don’t have time, it will take too long.
It’s become popular to complete tax returns online for speed and convenience. Doing your return online means no appointments, no travel and no excuses about not having enough time!
Plus, Etax.com.au goes a step further to save you time, by pre-filling your information.
6. I can’t afford to do my tax return right now.
Did you know that with some tax accountants, you don’t have to pay your tax agent fees upfront? Instead, you can opt to have the small fees deducted from your tax refund, later. Then, when your refund is issued by the ATO, your fee will be deducted from it and your remaining refund will be transferred to your bank account. How easy is that?!
7. I’m scared I’ll have an ATO debt.
Even if you don’t have money in your bank account, it’s easiest to get your tax returns up to date now, rather than later. And who knows, you might get a surprising refund instead!
If you do owe money to the ATO and you can’t afford the pay your tax bill right now, a tax agent can help arrange a payment schedule with the ATO instead. The ATO can be very reasonable about payments on overdue taxes IF you get your tax returns lodged accurately, honestly, and on time!
Did you receive JobKeeper payments?
If you received JobKeeper payments, it’s important that you paid tax on this income. This income is considered the same as any standard wage payments from your employer.
Unfortunately, due to the confusion around JobKeeper some employers did not withhold tax from the JobKeeper payments. This means that at tax time, the ATO will collect any tax that wasn’t withheld from the payments during the year and you could even find yourself with a tax bill.
It is important to check your pay slips to ensure that your employer is withholding the correct amount of tax while you receive the JobKeeper payment.
If you do find yourself in this situation, don’t stress! The ATO is usually very understanding in these circumstances and your tax agent can help negotiate a payment schedule help make any amount owing easier to manage.
8. I don’t know how to do my tax return.
Honestly, that’s a big reason most people use a tax agent. Their job is to make taxes easier for you. With support from qualified accountants, agents like Etax offer a simple way to do your return. Expert help is available as you go via Live Chat, My Messages, email and by phone. Plus, online videos and resources are just a click away.
The Etax chat team can help with questions about deductions, items you can claim, tax rules and just about anything else to do with your tax return.
9. I had no income this year.
Sorry, that’s no excuse.
Everyone needs to lodge either a ‘tax return’ or a ‘non-lodgment advice’ form to the ATO.
Even if you didn’t earn any income, you still need to lodge a non-lodgment form. This document tells the ATO you’re not lodging a tax return this year, and also ensures you’re not flagged for avoiding your tax return. Just because you didn’t earn any income doesn’t mean your off the hook at tax time!
A special and unusual thing about Etax is, they will do your non-lodgment advice for you, for free!
10. I earned less than the tax free threshold.
Even if you earned less than the tax free threshold of $18,200, you might still need to lodge a tax return.
This is only if you paid any tax on this income, or if you:
- are entitled to the private health insurance rebate
- have a reportable fringe benefits amount on your PAYG Summary
- have a reportable employer superannuation contribution on your PAYG Summary
- made a loss or can claim a loss made in a previous year
- are an Australian resident for tax purposes and you had exempt foreign employment income plus $1 or more of other income
What are you waiting for?
Well, there you have it! The top ten reasons for tax time procrastination debunked. Now that you can see how easy it is to get a wriggle on and do your tax return, what are you waiting for?