Taxpayers will need to lodge their returns for the 2021-22 financial year by 31 October either themselves or appoint a registered tax agent by this date.

Failure to lodge could result in one penalty unit for each 28 day period it's overdue, up to a maximum of five penalty units - for reference, one penalty unit is currently $222.

According to the ATO's assistant commissioner Tim Loh, 8.8 million had lodged their returns as of 11 October, which is up from 8.4 million at the same time in 2021.

However, the latest data from the tax office shows there are around 15 million taxpayers in Australia.

"It’s important to lodge your tax return on time, even if you think you’ll be getting a bill and won’t be able to pay the balance straight away. I’d encourage you to lodge when you can, even if you can’t pay. This helps you to understand your tax position, and we’re here to help you if you need support," Mr Loh said.

"Unlike a lot of life admin tasks, lodging your tax return isn’t optional. So rather than sorting out your sock drawer or keeping up to speed with the Targaryens’ family woes, set some time aside this weekend to get your tax return done. You can catch up on your sock audit and the Targaryens later."

For those with simple tax returns and positions, Mr Loh said using the ATO's own MyTax system - accessed through MyGov - can be a good port of call.

"Most of your income and personal details will already be provided; simply check the information is correct, add any additional income, claim your eligible deductions, and you’re done," he said.

How to get an extension

Mark Chapman, director of tax communications at H&R Block, advised those who are putting off their returns to consider using a tax agent.

This is because the deadline for tax agents to submit returns is as late as 15 May 2023.

"With only a few days left to go, you might well be feeling the pressure if you haven’t yet started your return. My key tip is that you should really be considering using a tax agent, particularly if you have been deterred from completing your return so far by the complexity of the task," Mr Chapman said.

"Taxpayers who use a tax agent can usually lodge well beyond the 31 October deadline without penalty. The ATO gives tax agents concessional extended deadlines which mean that they can lodge returns on behalf of clients up to 15 May 2023 without incurring any penalty."

Up to thousands of dollars left on the table

$1,500 lamington

Mr Chapman said for many Australians there is still up to $1,500 up for grabs with the Low Middle Income Tax Offset - the LMITO or colloquially known as the lamington. 

“For those who need an extra reason to submit their tax return before the 31 October deadline, here’s one: [up to] $1,500 tax back when you lodge your return," he said.

"You only receive the low-and-middle-income tax offset when you lodge this year's return. Quite an incentive to get your tax return done and lodged."

Those earning between $37,000 and $90,000 will receive the full $1,500 offset, while those earning over and under these salaries will receive less; those earning more than $126,000 won't receive any offset.

Unclaimed deductions

The 2021-22 financial year was the last that taxpayers could use the Covid-led 80c per hour shortcut deduction method.

The simplified deduction method simply allowed taxpayers to calculate how many days - and hours - they worked at home during the financial year and multiply it by 0.80 to get their claimable work-from-home deduction.

For example, this author worked 172 days at home last financial year, for 7.5 hours a day, resulting in up to $1,032 claimable. 

Although the method is simpler, it doesn't allow additional deductions for office expenses such as mobile phone use, internet, supplies and so on.

Mr Chapman said other methods that require more effort, receipts and documentation, might yield better returns.

"The 52 cent per hour flat rate or the ‘actual’ method ... allows you to make separate claims for the work-related proportion of items such as your home internet, mobile phone costs, depreciation of computer equipment, stationery, and printer ink," he said.

"Conversely, the ATO expects to see a reduction in claims for work related car use, accommodation, and travel.

"So if you’ve relied in the past on clocking up the kilometres in your work vehicle to boost your tax refund, you might be disappointed.

"The COVID-19 pandemic will almost certainly have massively reduced the size of your claim."

The ATO has recommended taxpayers using the 52c 'actual' method to keep receipts and other expenses filed in the ATO's own 'MyDeductions' mobile phone app.


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