Australians face fine by failing to lodge tax return by October 31 and how to get $2,580 tax refund

Australians who fail to file their tax returns within three weeks risk a $222 fine and a median income tax credit of up to $2,580 that will soon expire.

That Australian tax office fine grows to a maximum of $1,110, with the amount increased by $222 every 28 days after the October 31 deadline.

In 2020 and 2021, during the worst years of the pandemic, the tax authorities made it easy for individuals.

But with a national debt approaching $1 trillion, tax authorities are now cracking down on those who either failed to file tax returns online before Halloween or registered with a tax accountant.

Tamara Burns, a chartered accountant from Port Macquarie and director of PB Taxation Services, said her clients were fined for late filing tax returns for previous fiscal years.

“For the last few years when Covid hit, the tax office basically closed their collections departments, but in recent weeks we’ve seen them really ramp up their operations,” she told the Daily Mail Australia.

“They are chasing heavily for outstanding payments, outstanding debts and they are punishing and fining people quite severely compared to previous years.

“In my experience, most late fees have been waived over the past two years in recognition of the unprecedented times we were in.”

Mark Chapman, H&R Block’s director of tax communications, said individual taxpayers and businesses were generally not fined if they owed a refund.

But he said the IRS cracked down on those claiming deductions for union contributions, subscriptions, clothing, overtime meals, cell phone, internet and car use.

“The focus on home office costs, mobile phones and internet at home is likely to be particularly pronounced with so many people working from home because of Covid-19,” he told Daily Mail Australia.

Mr Chapman said the IRS would also crack down on those who falsely claimed work expenses of less than $300 without a receipt, which is allowed if there is a bank statement.

“The ATO believes that some taxpayers are claiming this — or an amount just under $300 — without actually incurring the expense,” he said.

Dry cleaning will also be scrutinized more closely.

“Claims for work-related clothing, dry cleaning and laundry costs, especially when Covid and working from home are expected to have led to a reduction in these claims,” ​​Mr Chapman said.

Tax returns for the previous fiscal year 2021-2022 give middle- and middle-income earners up to $1,500 in tax offsets, on top of another $1,080 in tax cuts introduced by the previous coalition government.

That brings the total maximum exemption to $2,580.

Settlement of low and middle income tax

Individuals who earn up to $126,000 and complete their tax returns for the past fiscal year qualify for the low and middle income tax of up to $1,080.

Former treasurer Josh Frydenberg’s budget for the March election supplemented that with a $420 tax offset for living expenses.

That means 4.6 million Australians earning between $48,000 and $90,000 will receive $1,500 in tax compensation, while another 1.8 million people with $37,000 to $48,000 will receive $675 back.

Tax Cuts

In addition, Australians will also receive tax cuts in the 2021-2022 financial year, thanks to measures taken by the previous government.

Those who earn between $48,000 and $90,000 get $2,580 back, when the $1,500 in tax offsets were combined with the $1,080 in tax cuts.

The tax offset, introduced in the October 2020 budget, expired on June 30, meaning individuals will not get it in 2022-23.

Fiscal year 2021-2022 is also the last year in which professionals who work from home can claim a flat rate of 80 cents per hour for every hour they spend at their dining room table or study.

That shortcut was introduced in March 2020 at the start of the pandemic and meant that individuals did not have to add up all their receipts related to working from home, under the alternative arrangement of claiming 52 cents per hour.

Australians who register with a tax accountant before October 31 will have until May 15 next year to file their tax returns.

Returns submitted electronically take 12 business days to process.

New treasurer Jim Chalmers is leaving Australians guessing whether Labor will keep the third-stage tax cuts voted for by the opposition.

“We’ve made it pretty clear that this October budget will be about implementing the commitments we’ve made to the people,” he told ABC Radio National on Tuesday.

“Our job is to make sure our budgets are perfectly aligned with the economic conditions we face.”

The Parliamentary Budget Office estimated that the third-phase tax cuts would cost $243 billion over a decade.

Government gross debt is approaching $1 trillion in 2023-24, following $300 billion in pandemic welfare measures in 2020.

The previous coalition government, backed by Labor in the opposition, introduced sweeping tax changes in the third phase in an election year in 2019, shortly before the pandemic.

Laws have been passed to reduce the number of tax brackets from five to four for the first time since 1984 from July 2024.

This would abolish the 37 percent tax bracket and create a new 30 percent tax bracket for all individuals earning between $45,000 and $200,000.

For those earning more than $200,000, a new marginal tax rate of 45 percent would apply.

This means that those who earn more than $200,000 on their tax returns for fiscal year 2024-25 will be refunded $11,640 compared to 2017-18 and $9,075 compared to 2023-24.

Someone who makes $80,000 gets back only $875.

Former Prime Minister and Treasurer John Howard, whose government introduced the GST in July 2000, said too much of the Commonwealth’s revenues depended on personal income taxes.

“The personal income tax burden in this country is too high,” he told ABC Radio National on Wednesday.

The statement that these so-called Stage Three personal tax cuts are for the rich is — to use that expression in a different context — a little rich.

‘We rely too heavily on personal income tax.’