Despite being something most of us tackle every year, lodging a tax return can easily end up at the bottom of your to-do list.
"Many families are experiencing financial stress during this cost-of-living crisis and, for some people, lodging their tax return may feel overwhelming," says Zena Burgess, CEO at the Australian Psychological Society.
"People may be concerned about receiving a tax bill, not filling out their details correctly, or it is simply a task that get pushed aside amongst life's unending to-do list."
And while it's tempting to put it off, facing tasks you've been avoiding can feel rewarding and bring a sense of relief, says Dr Burgess.
It might also be helpful to know the Australian Taxation Office (ATO) "would rather work with you than against you", even if you are late in filing, explains Natalie Peng, a lecturer in accounting at the University of Queensland's School of Business.
"The ATO cares more about you coming forward than being perfect."
Why tax time can feel overwhelming
Tax time can feel intimidating for many people, explains Dr Peng.
"It's the jargon and fear of getting it wrong, and the paperwork piles up.
"Especially if you have let it go for a while."
Angelique McInnes is a lecturer in financial planning at CQ University and says for people doing tax themselves, they may find myTax difficult to navigate.
"Especially if online [systems] is something they struggle with."
Stress around money and life administrative tasks can have a significant impact on people, says Dr Burgess.
"Financial stress can cause significant problems, including difficulty sleeping, changes in appetite, headaches, fatigue, irritability, difficulty concentrating, and feeling hopeless or helpless.
Where to start
Individual tax returns for the 2024/2025 financial year aren't due until October 31, so if you haven't done anything about that time frame yet, you're not behind.
But for those who are late on filing previous years, or fear they won't make the upcoming deadline, Dr Peng says it's important to deal with it as soon as possible.
"Act now before interest and penalties start piling up."
She says "not to panic" and contact the ATO to let them know where you are at.
For more tricky instances, perhaps where you are several years behind in tax, or have multiple jobs, Dr Peng recommends using a registered tax agent.
Working with a tax agent means you also have an extended deadline period for the previous financial year.
"A simple tax return might be $100 to $250, and that cost is tax deductible next year."
Dr Peng says the ATO can help arrange payment plans if you are anticipating a tax bill.
Their website has a range of information that might be helpful for support in difficult times, explains Dr McInnes, such as natural disaster support and personal crisis support.
Break the process into smaller steps
If you're feeling overwhelmed about your tax return or other financial tasks, Dr Burgess recommends finding simple ways to get started.
"It can help to schedule a time, and a follow-up time, to approach the task and put it in your calendar," she says.
"Even if it is two or three weeks away, knowing that you have taken the step to set aside time will help ease the stress that avoidance can generate."
Dr Burgess says if the task is not completed in that period, the follow up time is for finishing it.
"Like any task that feels initially overwhelming, it may help to break it down into small steps.
For example, the first scheduled time might be allocated simply for gathering the information and paperwork needed.
The benefit of getting on top of things
Dr Burgess says completing a task that you have been putting off can feel incredibly rewarding and bring with it a great sense of relief.
"When you remove the mental burden you have been carrying, you can often regain focus and the ability to move on to the next task with clarity.
From a financial perspective, the longer you leave it, the more at risk you may be of a failure to lodge penalty.
And you may be entitled to a tax refund, explains Dr McInnes, so there is reason to prioritise lodgement.
To get ahead on the following year, Dr Peng recommends people set reminders, store receipts in a way that is helpful for them, and considering a tax agent if the task historically gets away from you.
This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.
