Yahoo Finance Lodging too early could COST your tax return, ATO warns
Tax season is upon us, but the Australian Taxation Office (ATO) has warned that Australians overly eager for their tax refund may not see the cash as early as they want.
This is because lodging your tax return too early may mean crucial information is left out – and this is the number one reason why tax returns are delayed, said ATO assistant commissioner Tim Loh.
“We know people are eager to get their hands on their tax refund, as we had over 172,000 individual 2021 tax lodgments on 1 July,” Loh said.
“We understand the rush to get a refund as fast as possible but racing to lodge your return can often lead to easily avoidable mistakes.”
More about Tax 2021:
Before you can send off your tax return, all your income information needs to be filled out and accurate.
And that means most Aussies have to wait for their income statement (also known as payment summary, and used to be called a group certificate).
This will typically land on 14 July, but employers hard-hit by COVID-19 have until 31 July, the ATO advised.
And any other income that isn’t automatically pre-filled has to be included, too.
So it’s a good idea to wait another couple of weeks before filing your tax return, Loh said.
“By allowing more time, your return will be easy, speedy, and importantly, more accurate. By avoiding mistakes, we’ll be able to process your refund faster.”
Exactly when to lodge your tax return
It’s worth waiting until at least mid-July, when your income statement should be available.
But those wanting to be on the safe side should stick it out until the end of the month.
“Waiting until the end of July to lodge allows the ATO to add information into your tax return from employers, banks, private health insurers, and government agencies into your tax return,” said Loh.
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But CPA Australia senior manager of tax policy Elinor Kasapidis thinks you could wait even longer.
“We recommend waiting until at least August to lodge and checking MyGov to see if your pre-fill information is complete.
The ATO usually has to adjust about 230,000 tax returns or more using third-party data because all their data hasn’t been filled out when taxpayers have lodged.
As a result, Aussies have had to pay back part or all of their refund.
“If you lodge your return before all the pre-fill information is complete, there’s a greater chance it will include errors and your tax refund could change. If you’ve received too much, you will need to pay it back,” said Kasapidis.
The ATO usually has to adjust about 230,000 tax returns or more using third-party data because all their data hasn’t been filled out when they lodge.
As a result, Aussies have had to pay back part or all of their refund.
Other reasons why tax refunds get held back is because people’s bank details aren’t filled out or are outdated.
“To avoid errors and delays, we ask that you double check all the information in your return before hitting submit,” said the assistant commissioner.
Ultimately, though, it’s better to lodge too early than to miss the deadline altogether, said Kasipidis.
“Make sure you’re aware of the due dates and set yourself a reminder. If you’re doing your own tax return, you have until 1 November to lodge, or longer if you have a tax agent.”
Read next: Tax 2021: Should I DIY, or get a tax agent?
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