It’s time to lodge your tax returns if you wish to avoid a failure to lodge on time penalty from the Australian Taxation Office, warns BMT tax depreciation specialists’ managing director Brad Beer.
Tax returns need to be lodged by 31 October to avoid any potential late fines.
“For property investors, lodging a tax return is an opportunity to maximise the cash flows on their investment by submitting claims for depreciation deductions on both capital works and plant and equipment,” said Beer.
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“Submitting this past 31 October might mean risking a penalty, which could then reduce the net cash flows otherwise derived from the asset,” he said.
The penalty for late lodgement is $170 per 28 day block of failure to lodge. If you haven’t complied with a request to lodge, or have a poor lodgement history, it’s more likely you may be stuck with the penalty.
“One of the cash flows generated by an investment property outside of rental payments comes from the depreciation deductions which are itemised in a professional tax depreciation schedule,” Beer said.
“However, these cash flows will be significantly reduced if investors forget to submit on time and incur one, or even multiple, penalties.”
Beer encourages investors to contact a tax agent if you haven’t yet submitted your tax return, as they may be able to lodge past the 31 October deadline.