'It's best to wait': ATO reiterates warning about common tax mistakes
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Tax time is just around the corner! For millions of Aussies, July means a much-needed cash boost could be on the way.
Before rushing to lodge a tax return the moment the clock strikes 1 July, the Australian Taxation Office (ATO) and financial experts urged everyone to act with caution.
With the average tax refund sitting at a tidy $1,288 per person, it's no wonder many are eager to get their hands on that extra money.
However, moving too quickly could end up costing Aussies more than what they bargained for.
A common belief about tax returns is that when they are lodged earlier than the set deadline, tax returns will be released into one's bank account sooner.
Yet, according to CPA Australia's tax lead Jenny Wong, this is a misconception.
The information the ATO needs to process returns, such as income details and private health insurance information, are not yet visible at the beginning of July.
'Firing the starting pistol on your tax return too quickly means you could end up shooting yourself in the foot,' Ms Wong warned.
'There's a misconception that lodging early means you'll receive your refund first, but it's not as simple as that.'
'It's common for people who lodge early to end up having to amend their returns later anyway, so it's best to wait. It'll save you in the long run,' Ms Wong added.
According to last year's Finder research, tax refunds are essential for many Australians.
Nearly one in four people have already planned to use their tax refund to cover essential expenses, such as household bills or insurance.
About four per cent of the survey's respondents hope to use the returns to pay credit card debt,
Meanwhile, one in ten wanted to put the money towards their mortgage.
With many Australians relying on this annual windfall, it's understandable that people are keen to get their returns as soon as possible.
Learn more about the possible changes in this year's tax return season:
Source: ABC News Australia/YouTube
However, lodging a return before employers and health insurers could render one's application incorrect.
Aussies might not get the refund they have been expecting or owe money back.
Ms Wong also pointed out another common pitfall while lodging: copying last year's return.
'Some people cut and paste from their last return and fail to consider any changes to their circumstances,' she shared.
'Maybe you started a new job where you had to buy tools, subscriptions, or pay for training and security clearances, for example.'
With technology also advancing, CPA Australia warned against the use of artificial intelligence (AI) tools such as ChatGPT for tax advice.
So, when should Aussies lodge their tax returns?
The ATO recommended waiting until late July or early August to lodge tax returns.
By then, most employers and insurers will have provided the necessary details.
This year, the ATO is set to roll out a new feature to aid Aussies, especially seniors, in filing their returns.
The Australian Taxation Office (ATO) has been considering an 'assisted assessment' system for tax returns.
Should the assisted assessment be implemented, people with simple tax affairs may receive a comprehensive, pre-filled evaluation and have to confirm its accuracy.
Seniors may have unique deductions available to their age bracket—medical expenses, work-related costs for employed seniors, or self-education expenses.
While it's tempting to get tax returns as soon as possible, a little patience could go a long way.
Have you ever lodged your tax return early and had to fix it later on? Do you have any tried-and-true tax time tips to share with everyone? We'd love to read your stories and advice in the comments below.
Before rushing to lodge a tax return the moment the clock strikes 1 July, the Australian Taxation Office (ATO) and financial experts urged everyone to act with caution.
With the average tax refund sitting at a tidy $1,288 per person, it's no wonder many are eager to get their hands on that extra money.
However, moving too quickly could end up costing Aussies more than what they bargained for.
A common belief about tax returns is that when they are lodged earlier than the set deadline, tax returns will be released into one's bank account sooner.
Aussies are gearing up for tax return season later this year. Image Credit: Pexels/Nataliya Vaitkevich
Yet, according to CPA Australia's tax lead Jenny Wong, this is a misconception.
The information the ATO needs to process returns, such as income details and private health insurance information, are not yet visible at the beginning of July.
'Firing the starting pistol on your tax return too quickly means you could end up shooting yourself in the foot,' Ms Wong warned.
'There's a misconception that lodging early means you'll receive your refund first, but it's not as simple as that.'
'It's common for people who lodge early to end up having to amend their returns later anyway, so it's best to wait. It'll save you in the long run,' Ms Wong added.
According to last year's Finder research, tax refunds are essential for many Australians.
Nearly one in four people have already planned to use their tax refund to cover essential expenses, such as household bills or insurance.
About four per cent of the survey's respondents hope to use the returns to pay credit card debt,
Meanwhile, one in ten wanted to put the money towards their mortgage.
With many Australians relying on this annual windfall, it's understandable that people are keen to get their returns as soon as possible.
Learn more about the possible changes in this year's tax return season:
Source: ABC News Australia/YouTube
However, lodging a return before employers and health insurers could render one's application incorrect.
Aussies might not get the refund they have been expecting or owe money back.
Ms Wong also pointed out another common pitfall while lodging: copying last year's return.
'Some people cut and paste from their last return and fail to consider any changes to their circumstances,' she shared.
'Maybe you started a new job where you had to buy tools, subscriptions, or pay for training and security clearances, for example.'
With technology also advancing, CPA Australia warned against the use of artificial intelligence (AI) tools such as ChatGPT for tax advice.
So, when should Aussies lodge their tax returns?
The ATO recommended waiting until late July or early August to lodge tax returns.
By then, most employers and insurers will have provided the necessary details.
This year, the ATO is set to roll out a new feature to aid Aussies, especially seniors, in filing their returns.
The Australian Taxation Office (ATO) has been considering an 'assisted assessment' system for tax returns.
Should the assisted assessment be implemented, people with simple tax affairs may receive a comprehensive, pre-filled evaluation and have to confirm its accuracy.
Seniors may have unique deductions available to their age bracket—medical expenses, work-related costs for employed seniors, or self-education expenses.
While it's tempting to get tax returns as soon as possible, a little patience could go a long way.
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