Finance

5 tips to get your tax in order before October 31

- October 23, 2020 2 MIN READ

If you run a side hustle you have less than two weeks to lodge your individual tax return of face fines from the Australian Tax Office (ATO). Don’t stress – these tips from Chartered Accountants Australia will help simplify things.

“For some, the process of lodging a tax return can seem daunting, however knowing a few tips can make the process a lot easier,” Chartered Accountants Australia and New Zealand Senior Tax Advocate Susan Franks said.

Key tax tips everyone should know:

1, Know the Deadline Date and gather information

“It may seem obvious, but the crucial date individuals need to know is 31 October, which is the tax return due date if you’re lodging your tax return yourself,” Franks said.

“The ATO will have pre-filled a lot of information in your tax return – such as salary and wages, interest and dividend income, medical insurance and bank account details to send your refund to.

“You will need to confirm that these details are true and correct, that you have reported all your income and have the necessary records to support your deductions.

“Before you lodge, you should have on hand your tax file number, income sources, bank account details, Medicare information and, if you are married, details of your spouse’s taxable income.

“You should also have records supporting any deductions that you are claiming.

“Give yourself plenty of time to source this key information which is needed before you can finalise your tax return.”

2. The Deadline Extension Loophole

“While individual tax returns are due on 31 October, if you are lodging through an accountant you will be entitled to a longer period – subject to your lodgment history,” Franks said.

“To be eligible for the extension you need to see your local Chartered Accountant prior to October 31 and remember, the cost for this is completely tax-deductible!”

3. Report All Income

“It’s vital you declare all your income. Any income received from second jobs will also need to be reported, as well as any Government payments,” Franks said.

“This includes money earnt from providing ride-sharing or accommodation services.

“The Australian Tax Office (ATO) receives information about these payments so ensure that you report them in your tax return to avoid questioning from the ATO.”

4. Low-Interest Payment Plans

“For those struggling to find the cash to pay their tax, there is the option of engaging in a tax debt payment plan with the ATO, to help you pay existing and ongoing tax liabilities,” Franks said.

“Anyone struggling with the financial impact of COVID-19 should discuss this with the ATO, or your Chartered Accountant, rather than hoping the ATO goes away.”

5. Still Miss the Tax Return Deadline?

“If for whatever reason life gets in the way and you miss the deadline, the important thing to do is to speak with the ATO as soon as possible,” Franks said.

“Your Chartered Accountant can help facilitate contact with the ATO and can help get your tax return in quickly to help you avoid accumulating more late penalties.”

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