Tax time, it can be both the best and the worst time of the year. The best, if you are lucky enough to receive a small windfall from the government to help with debt, or the worst if you find yourself owing money.
Here at Debt Cutter, we often come across small business owners, tradies, sole traders, and every day Aussies who owe the Australian Tax Office (ATO). Unfortunately ignoring the debt, and hiding under the blanket is not a solution here. The ATO is one of the most unforgiving of all creditors, and the hardest to negotiate with as well.
If you do find yourself with a tax bill, there are a few things you can do. However, before we get into our tips, make sure to check out some of our previous blogs on tax – 9 tax time tips and our top tips for surviving tax time.
Tip 1: You will have to pay it
Your tax bill is a government debt; you will always have to pay it back. Unlike other creditors, the ATO will be chasing you with the full force of the law (and government).
It’s important you don’t ignore this, and tackle the issue head on. Although it is the government, if you are open and honest, the public servants do try and come up with a solution which works for you – there are many empathetic people working in government that legitimately just want to help you.
Tip 2: Negotiate a payment plan
If you owe the tax man money, you are going to need some help with debt. If you cannot afford to pay your notice of assessment, make sure to contact the ATO straight away and arrange for a payment plan to be put in place.
If you have multiple debts you are struggling with, it may be worth considering a professional debt negotiator. They can negotiate to have your debt put into a payment arrangement with all of your other debts for a period of time, giving you some relief.
However, once the arrangement has ended with your other debts, you may still be left owing the tax man money and may still have to make payments towards your ATO debt.
Tip 3: Seek professional help
When it comes to the ATO you can’t go down the whole ‘I don’t agree so I am not going to pay you route’. If the ATO says you owe them money, then you do, end of story. This is why when this occurs it is important to seek professional help.
If you do not agree with your lodgement, make sure to contact a qualified accountant straight away. They will charge you, but if you strongly believe the statement of tax was incorrect this may be your best way to get the ATO to change their mind.
Tax is difficult, and it’s not fun. It becomes even less so when you find out you owe the ATO money. It’s important you tackle the issue head on instead of ignoring it, hoping it will go away. It’s not too late to get help with debt.