It’s tax time again. And while you may be super organised and have all your receipts and claims ready to go, lodging your return with the Australian Taxation Office (ATO) too soon could end up costing you time and money.
And no-one wants to potentially lose money in a year in which many can expect bigger returns. That’s due to the government’s extension of the Low and Middle Income Tax Offset (LMITO) and the stage two tax cuts that were meant to start on 1 July 2022 but were brought forward and backdated to 1 July 2020 as a pandemic stimulus measure. Because it took until 6 October 2020 for those laws to be legislated, many workers paid too much tax for months.
Tax returns can be lodged after 30 June, but even the ATO says it’s wise to wait a little longer.
The 2020-21 financial year has officially ended, but employers, banks, government agencies and superannuation funds have until 31 July to provide the ATO with income statements through its Single Touch Payroll (STP) system. The ATO uses this information to pre-fill tax forms.
Read more: How can we reduce our capital gains tax?
Anyone lodging a return with the ATO before this date will have to input this income data themselves.
The ATO advises that returns lodged before the 31 July cut-off date for STP data will take more time to process and will be subject to a greater level of scrutiny than those with pre-filled data. Ironically, waiting until after July to lodge your return could mean you get your refund more quickly than those who sent theirs in early.
And anyone who put in their own data and made an error will have to resubmit their return. This could delay a refund for weeks.
“We think the best time to lodge is at the end of July,” ATO assistant commissioner Tim Loh told The New Daily.
“There’s no need to rush,” he says.
“When I do my return at the end of July, and normally a bit later then that even, I normally get my refund a lot quicker.”
Read more: Why you won’t be able to use cryptocurrency to dodge tax
H&R Block tax director Mark Chapman says workers should delay lodging returns until their income, insurances, dividends and bank interest details are available.
“Typically, this information takes a few weeks to be submitted, and if you’re lodging in the first week of July, some of that important information could be missing,” he told The New Daily.
“Alternatively, if you’ve got the information yourself, and if you’ve got the correct paperwork, you can manually import that information and not have to worry about those sections being pre-filled.”
Taxpayers have until 31 October to lodge their returns if doing them themselves, or until 15 May if they are lodging through a registered tax agent.
Tax advisers are also warning of a looming crackdown by the ATO on excessive deduction claims and unreported capital gains related to cryptocurrencies.
“While it appears that cryptocurrency operates in an anonymous digital world, we closely track where it interacts with the real world through data from banks, financial institutions, and cryptocurrency online exchanges to follow the money back to the taxpayer,” Mr Loh says.
And on the working-from-home front, he says: “We know many people started working from home during COVID-19, so a jump in these claims is expected. But, if you are working at home, we would not expect to see claims for travelling between worksites, laundering uniforms or business trips.
“Our data analytics will be on the lookout for unusually high claims this tax time, particularly where someone’s deductions are much higher than others with a similar job and income.”
How early do you lodge your tax return? Have you ever needed to resubmit? Let us know in the comment section below.
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