Returns back to haunt you

By Kath Gannaway
YOU haven’t put in a tax return for a year or two… maybe even four or five!
You think you’re probably the only person in Australia who hasn’t and, after all, the tax man is pretty busy – he’ll probably never even notice!
And you don’t even want to think about the massive interest and penalties.
So the best thing you can do is keep a low profile and put it off for another year.
Right?
Wrong! Wrong! Wrong… and, according to Healesville tax accountant Michelle Labahn, wrong again!
As the principal of Michelle Labahn and Associates in Healesville, she has good news and good advice for tax procrastinators.
First: You are not alone. “It happens to more people than you think,” she said.
Second: It’s never too late. Even with missing group certificates and other documents, it can be sorted – “quickly, easily and painlessly.”
Third: Penalties, if any, are usually minimal. “High penalties and interest are a bit of a myth. They usually work out to be very minimal and, if the person is a wage and salary earner, often there is a refund,” Ms Labahn said.
“If paperwork is incomplete you can apply for a copy of your group certificate from previous employers or from Centrelink, or you can do a statutory declaration,” she explained.
For parents on certain Centrelink payments, however, it is critical that a tax return is done every year.
Ms Labahn, who is a certified practicing accountant (CPA), and a member of the National Tax and Accountants Association (NTAA), said: “As soon as someone goes two years (without putting in a return), they are in trouble.
“If they are on a child payment from Centrelink, they will be asked to repay any money they have received. They may also miss out on receiving extra payments,” she said.
“Most people who are in that situation really worry about it.”
Of course, there is some reason to worry. The tax man is busy… but not that busy.
Sooner or later, the letter will come and some people end up in court.