Tax season is upon us and many Australians will be keen to land a hefty refund.
But they might be better off waiting until the end of July to lodge their returns.
The Australian Taxation Office is urging Australians to hold off lodging as early claims will cop more scrutiny and take longer to approve.
That’s because the ATO is still waiting to receive important information that will make it easier for taxpayers to file their returns with pre-filled forms.
Consequently, assistant commissioner Tim Loh said tax time early birds aren’t always winners when it comes to receiving a timely tax refund.
“We think the best time to lodge is at the end of July,” he told TND.
Tax return: Why it pays to wait
Mr Loh said the ATO is still waiting on third-party data from employers, banks, government agencies and superannuation funds that is used to pre-fill a number of forms on tax returns.
It means that tax returns filed before that data has been received will be harder to lodge for taxpayers and will also require more scrutiny from the ATO.
“There’s no need to rush,” Mr Loh said.
“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.”
Employers aren’t required to finalise their Single Touch Payroll (STP) data – which provides pre-fill data for incomes – until July 31.
And you have until October 31 to file your tax return if you’re doing it yourself, or until May 15 if you’re submitting it through a tax agent.
Mr Loh said waiting until the pre-fill information is available will help to ensure you don’t make a mistake on you return, which would trigger a longer wait as you would need to go back and change the incorrect information.
Those who file their returns earlier are also likely to face more quality assurance checks because there is less pre-fill information for the ATO to go on, Mr Loh said.
Millions of Australians are itching to file their tax returns, though, because hundreds of dollars are up for grabs under the low-and-middle-income tax offset (LMITO) scheme.
But Mr Loh said the scheme had had little effect on people’s tax return activity so far, with demand among early birds about the same level this year as it was last year when the LMITO was also offered.
“It’s pretty much on par with last year,” he said.
Although that suggests the overall volumes are high.
Last year’s tax time rush broke records, with more than a million people filing returns within two weeks of July 1 amid the fallout from the COVID-19 pandemic.