It’s almost a month into the new financial year and for millions of Australians, that means now is the time to file your tax return.

A wide range of pre-fill data is available on the Australian Taxation Office (ATO) myGov platform that enables taxpayers to complete 2022-23 returns with minimal hassle.

“Most of the information we collect from employers, banks, private health insurers, share registries, and other government agencies will be pre-filled in your tax return by the end of July,” an ATO spokesperson said.

“If your financial affairs are fairly straightforward the information you need to lodge will be available – but remember, you still need to check your details are accurate before you submit your return.

“We encourage you to take a look at our occupation guides to work out what you can and can’t claim this year.”

But anyone expecting a bumper return like those relished during the COVID-19 years might want to temper their expectations.

“The outcome of tax returns this year may be different than in previous years, with some people receiving a lower refund than expected, or even a tax bill,” the ATO spokesperson said.

There are a few reasons to expect smaller refunds this time.

That includes the low- and middle-income tax offset (LMITO) no longer being available this year, while changes to work from home expense claims may also leave some taxpayers in the lurch.

Some Australians may even end up owing money to the tax office, but everyone’s situation is different so it’s best to consult with a tax agent about your circumstances.

LMITO is no more

The first major change this year is that the LMITO has stopped, so the generous tax offsets that were available to millions of Australians in recent years are no longer given.

Previously, a tax offset between $255 and $1080 was available for people earning between $37,500 and $90,000 under stimulus measures designed to assist with the pandemic.

However, in 2023 only the Low Income Tax Offset (LITO) is  available, which provides an offset of up to $700 for people earning between $37,500 and $66,000 a year.

That means more than a million taxpayers with income between $66,000 and $90,000 a year won’t be eligible to claim a tax offset in the 2022-23 financial year.

Work-from-home changes

The other major change that could reduce tax returns for many workers are new rules around work-from-home expense claims.

In a move that accountants believe will leave many people in the lurch this year, the ATO is requiring taxpayers to present real-time diaries of their WFH hours in order to claim expenses.

Depreciation claims must also be made separately to running expenses under a revised fixed-rate method for calculating claims that was brought in now that the COVID-era shortcut method has expired.

Leading experts have previously told TND that the requirement to keep real-time records of remote work hours would hinder taxpayers because many are likely to have missed the memo.

Higher tax bracket?

Another reason your tax refund might be smaller – or non-existent – this year is that you’ve gone up a tax bracket.

If you’ve earned more money over the past financial year and have an outstanding HECS/HELP debt then you could be stung by this.

Essentially, because public student debts accumulate over the course of a financial year and don’t get applied to the actual loan until tax time, you could end up needing to pay more.

That’s because you could have moved up a tier in the HECS/HELP repayment thresholds due to that income increase, requiring you to pay more.

Tax debt? Here’s what to do

If you’ve found yourself with a tax debt this year that you don’t have the capacity to pay, there are a few options.

First, you can apply for financial hardship relief with the tax office if you believe you don’t have the ability to pay down the debt.

The ATO characterises serious financial hardship in a variety of ways, including an inability to pay for food, accommodation, clothing, medical treatment, education or other basic necessities.

You could be asked to provide evidence of hardship.

But even if you don’t qualify, you may be able to get the ATO to put you on a payment plan for your debt so it doesn’t hit all at once.