The best time to lodge your tax return
Over two million Australians are sweating on this year's tax refund. But being first across the line could work against you.
As Australians navigate a cost-of-living crunch, this year's tax refund is shaping up to be a lot more than a handy windfall.
Research by Finder shows 2.4 million Australians say their tax refund is essential to their financial wellbeing.
The cash squeeze can make it tempting to rush to complete your tax return.
But a tax time sprint can cost you dearly.
Avoid missing key details
The Australian Taxation Office (ATO) is cautioning taxpayers not to rush lodging their annual tax return.
ATO Assistant Commissioner Tim Loh says tax returns submitted early in July are more likely to be changed by the ATO compared to those lodged later.
That's because the ATO partially completes individual tax returns using pre-filled information such as wages and tax withheld, plus interest earnings on bank accounts.
These details are sent to the ATO from employers, banks, government agencies and health funds, and they can take time to arrive following June 30.
Loh says it can take until late July for all the essential information to be automatically loaded in tax returns. This applies whether you use a registered tax agent or lodge your own return.
According to Loh, lodging a tax return before all the pre-fill details are available can just slow the progress of your return.
One in two want to lodge ASAP
A poll by accounting body CPA Australia shows the majority of us (54%) are looking to lodge our tax returns ASAP.
Elinor Kasapidis, head of policy and advocacy at CPA Australia, says, "This is sounding alarm bells for CPA Australia because it's the opposite of what the ATO is asking people to do - which is to wait."
To check if your employer has submitted wage details, head to your myGov account. Your PAYG Payment Summary or Income Statement should be marked as 'Tax Ready'.
To be sure the ATO has received all the necessary pre-fill information, simply start your tax return in myTax or ask your tax agent.
'Mistakes are easier to make'
Holding off with your tax return isn't just about the availability of pre-filled information.
As Kasapidis cautions, a hurried approach means "mistakes are easier to make".
If you later discover an error in your tax return, it's possible to fix it yourself using the ATO's online amendment process. This can be accessed via myGov or by speaking to your tax agent.
The problem is that amending a tax return can have flow-on effects especially if it results in an uptick in taxable income.
You could be asked to pay back part of a tax refund. It can also impact Centrelink support payments, child support payments, and money owed through the Medicare Levy.
"It's much better to get your return right the first time," notes Kasapidis. "Instead of rushing to lodge, we recommend you make the most of this time to get your records in order."
Hopes of a big refund may be dashed
There is another reason to take the pedal off the metal.
This year's tax refund could be well down on last year's.
The ATO is warning it expects fewer people to receive a refund this year. Others may pocket a smaller refund than expected, and more could owe a tax debt.
One reason for this is the scrapping of the $1500 low to middle income tax offset (LMITO), which ended on June 30 last year.
If it turns out you're lumbered with an unexpected tax debt, you may be able to set up a personal payment plan via the ATO website.
"If you need additional support, reach out to us or have a chat with your registered tax agent as early as possible so we can find a solution," says Loh.
This year's tax return needs to be lodged by October 31. This deadline can be stretched, potentially to next May, if you use a registered tax agent, but you'll need to be on their books by October 31.
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