If you prepare your own tax return, it is due for lodgement by the 31st of October and payment within 21 days of that deadline. However, if you lodge through a Registered Tax Agent, you may automatically qualify for extensions. This post provides an overview of the main extensions for individual income tax returns.
Refundable returns are never late?
In most cases, you will not receive (or can get refunded) a late lodgement penalty if your tax return results in a refund. However, the ATO does not allow ‘unlimited’ extensions and may penalise you for not complying with your obligations.
I have noticed that most clients want to obtain their refunds as soon as possible.
No extensions for late lodgers
If you have one or more prior year returns outstanding at 30 June, or you have been prosecuted for non-lodgement of prior year returns, there are no extensions available.
Late payment interest is calculated from your original due date, so don’t be late!
If your latest return resulted in a tax liability of $20,000 or more, your due date is usually 31 March.
Any individual tax returns that do not fall under the above headings may be automatically granted an extension to 31 May.
Apply for further extensions
Your tax agent can apply for further extensions in many of the above situations.
In the best case scenario, this allows an extension until 5 June, i.e. almost 12 months after the tax year ended. However, this is generally a last resort to assist extremely busy tax agents.
Extensions also apply to your tax bill
Generally, you must pay your tax bill (if any) within 21 days of the due date.
To obtain the greatest benefit from the extensions, I aim to prepare (but not lodge) my clients’ tax returns well in advance of the due date. If the client has to pay tax, they have plenty of time to save money. Imagine knowing how much you will have to pay in July or August, but having until May or June the following year to save the money.
Register with a Tax Agent before 31 October
To be eligible for the extensions, you must be registered as a client of a tax agent before the 31st of October.
Once you register, your tax agent will be able to see your due date in their online systems.
As with anything tax, it is best to ask your tax accountant about your specific situation.