Putting off your tax return? You have a month to file

A big tax deadline is looming, with the start of October kicking the countdown into gear. 

Here's what you need to know if you haven't filed your tax return for the 2025–26 financial year yet. 

When are tax returns due?

The due date this year is Monday, November 2. 

Usually, people who do their own tax returns must lodge them by October 31. 

But this year, that falls on a Saturday.

And the Australian Taxation Office (ATO) says that if October 31 falls on a weekend, the due date is the next business day. 

So, this year, the due date is actually on Monday, November 2. 

If you're having a tax agent file your return, they'll generally have a special lodgement schedule, which means they may be able to lodge returns for clients later than November 2. 

However, the ATO says you need to engage a tax agent before October 31 if you're going down this path, so make sure you book your appointment before the end of the month. 

Is there a fine for filing late?

There can be. 

But the ATO says it considers a person's individual circumstances before deciding what action to take and whether they'll be sent a failure to lodge (FTL) notice. 

"We recognise that sometimes people don't meet their lodgement obligations on time, even with the best intentions," the ATO says. 

"Generally, we don't apply penalties in isolated cases of late lodgement."

You can expect to hear from the ATO before getting a penalty notice. 

"If you fail to lodge on time, we'll warn you by phone or in writing before we apply a failure to lodge penalty and issue you a notice to lodge," the ATO says. 

"This will give you the opportunity to lodge or give you the opportunity to engage with us if you're experiencing circumstances preventing you from lodging."

Will I get a tax refund? 

"Some workers genuinely are owed a refund due to over-withholding or legitimate deductions," said Jenny Wong, the tax lead at accounting body CPA Australia. 

"But a significant group overestimates what they'll receive."

Part of the expectation for a tax refund comes from the days of the low and middle income tax offset (LMITO).

For Australians earning up to $126,000, LMITO delivered a tax break ranging from $255 to $1,080 in 2018–19, 2019–20 and 2020–21.

There was a one-off increase to ease cost-of-living pressures in 2021–22, lifting the base amount to $675 and the full amount to $1,500.

"LMITO created an expectation of a tax refund in prior years," Ms Wong said. 

And even though that offset ended years ago, its impact on the Australian mindset about tax returns has lingered.

The LMITO hangover

The hangover from the LMITO years may have led some to assume this year's budget announcements would result in a $1,250 cash payment in their tax returns, when that's not the case. 

But it's more than that. 

Our tax returns can have complications we didn't anticipate (more on that below), and we may have overestimated how much deductions will benefit us. 

For example, it's easy to assume a few thousand dollars in work expenses and charity donations will all come back to us as a refund.

But the way deductions are calculated often means taxpayers receive only a small fraction of that money back. 

"Australia has a clear culture around deductions," said Elizabeth Morton, a senior lecturer at Curtin University and chartered accountant.

"A lot of errors taxpayers make relate to problems with deductions."

Dr Morton said that included:

• claiming things that aren't deductible
• not being able to substantiate an expense
• not apportioning how much of their deduction is used outside of work
• not claiming in line with prescribed methods
• claiming capital expenditure outright

"All of these will likely result in over-claiming of deductions, therefore underpayment of tax," Dr Morton said. 

How much should we be getting back?

Obviously there's no one answer to this question. It really depends on your own personal circumstances. 

However, let's assume you have only one job and no income from other sources, no work-related deductions, and no donations to charities in the past financial year. 

"If the employer calculates Pay As You Go salary withholding tax correctly, it should generally cover an employee's final tax bill," Ms Wong said. 

"The employee should not expect a tax refund."

It's a good idea to approach filing your tax return with low expectations. 

"We need to be careful of assuming that we will get a refund each year," Dr Morton said. 

But aren't we entitled to claim?

There's a balance to strike here, because there are plenty of legitimate reasons to claim deductions on your tax return. 

And Dr Morton said the onus was on taxpayers to get it right. 

"It is important that taxpayers understand that they are permitted by law to claim deductions that are allowable," she said. 

"So taxpayers can miss out on deductions if they are not aware of the rules, or if they don't keep proper records."

The taxation system can seem daunting, so many people turn to accountants to help them navigate the process.

While the cost of using professionals to prepare your tax return is tax deductible, the up-front cost for an accountant can be prohibitive. 

There are, however, a series of free tax clinics around the country that offer eligible people help to file their tax returns. 

Many of those clinics are in major cities, but some do offer virtual sessions for people in regional and rural areas. 

You can check if you're eligible for free tax assistance here and check out the nearest tax clinic to you here. 

The ATO also has a comprehensive guide to deductions according to a range of industries. 

So why is my tax return so low this year?

"There could be multiple reasons why people are caught off guard by minimal refunds or tax bills," Ms Wong said. 

"A worker working multiple jobs but then ticks the box on their Tax File Number (TFN) declaration form telling all their employers to stop taxing the first $18,200 from their pay — meaning each employer withholds less tax than they should.

"Or the worker may have student HELP/HECS debts but did not tick the box to withhold extra from their pay."

The Medicare levy surcharge may also catch higher earners out if they don't have what the Australian Taxation Office defines as appropriate private health insurance.

"Whether they have private health insurance can lead to some issues, particularly if their income is above the threshold, or the rebate rate they are claiming is not aligned to their income," Dr Morton said. 

The threshold for paying the Medicare levy surcharge is more than $101,000 for singles and $202,000 (plus $1,500 for each dependent child after the first one) for families.