The end of the 2019-20 financial year is only a week away, meaning Australians are scurrying for last-minute tax deductions and organising libraries of receipts.
And although many will want to lodge their return as soon as possible to get their hands on some cash, tax experts say getting in too early could lead to a smaller refund.
This is because it takes weeks for employers to send income statements to the Australian Taxation Office, which requires information to determine the size of your tax refund.
H&R Block director of tax communications Mark Chapman said it’s crucial that workers hold out lodging their returns until their income, insurances, dividends and bank interest details are available.
If they lodge their return before the ATO has this information, taxpayers will have to lodge a second one and could potentially receive a bill, he said.
“Typically, this information takes a few weeks to be submitted, and if you’re lodging in the first week of July, some of that important information could be missing,” Mr Chapman told The New Daily.
“Alternatively, if you’ve got the information yourself, and if you’ve got the correct paperwork, you can manually import that information and not have to worry about those sections being pre-filled.”
Despite the ATO overseeing the rollout of stimulus measures including JobKeeper, Mr Chapman said taxpayers should see no difference in refund processing times.
“There should be no impact on the ATO’s capacity as they’ve taken on extra resources, so refunds should still be received within five to 10 working days,” Mr Chapman said.
With a number of crucial deadlines fast approaching, here are the important dates you need to know.
The key tax time dates, and what they mean
June 30: The final day of the 2019-20 financial year. This is the deadline for concessional superannuation contributions, buying tax-deductible items and instant asset write-offs. It’s also a good time to finalise travel and working-from-home log books, and request missing receipts from retailers.
July 1: Australians can begin lodging their tax returns for the 2019-20 financial year. However, some taxpayers’ income details may not be available until the end of July.
July 28: This is the deadline for employers to pay super contributions into their employees’ funds for the April-June quarter.
July 31: Employers must finalise employees’ income statements using the ATO’s Single Touch Payroll (STP) system. Some workers would have seen their income automatically loaded under STP (instead of a group certificate) last year, but most employers have now transitioned to this system. Employees will receive a notification from the ATO on MyGov after July 1 when income details are finalised.
October 31: For taxpayers lodging returns themselves, this is the final deadline for tax returns. The ATO will, however, grant extensions for taxpayers in certain circumstances.
May 15, 2021: For taxpayers lodging through a tax agent, this is the final deadline for tax returns.
Harsh penalties for not meeting deadlines
The ATO went easy on taxpayers who left their lodgements to the last minute last financial year because of the pandemic.
Not only did it extend the deadline for those lodging through an agent from May 15 to June 5, it also waived late lodgement fees for taxpayers who failed to meet this deadline but lodged by June 30.
However, Mr Chapman believes the ATO will not display the same leniency for 2019-20 tax returns.
“Having said that, if COVID-19 is still an issue or other major disasters hit, such as the bushfire crisis we saw at the beginning of the year, we may see the ATO have a more relaxed attitude once again,” Mr Chapman said.
The price for missing crucial deadlines is steep.
According to the ATO, taxpayers will receive a $210 financial penalty for every 28 days their return is overdue, up to a maximum of $1050.