While the brand new monetary yr might have introduced on pleasure on the considered a tax refund, Australians are warned to not rush with lodging their returns.
About 14 million Australians are as a consequence of submit their returns within the coming weeks however the Australian Tax Office (ATO) says it isn’t all the time greatest to get in early.
Here’s why and when you should soar in.
When can I lodge my tax return?
You can lodge your tax return for the 2023/24 monetary yr now.
But that does not imply you should rush to get it in.
The Australian Tax Office really recommends ready a number of weeks.
Why is it higher to wait?
ATO Assistant Commissioner Rob Thomson mentioned individuals who lodge in early July are twice as prone to make a mistake on their return.
“There is a much higher chance that your return will be missing important information if you lodge in early July,” he mentioned in an announcement.
“This is particularly relevant if you are receiving income from multiple sources.
“We see a number of errors the place individuals who rush to lodge early have forgotten to incorporate curiosity from banks, dividend revenue, funds from authorities companies and personal medical health insurance particulars.”
To keep away from errors like this, the ATO can pre-fill many particulars for you, however it takes them a number of weeks to gather the knowledge.
How do I do know when the ATO has completed gathering info?
Your income statement — a summary prepared by your employer of your salary and taxes paid for the year — will be marked as “tax prepared”.
This will be shown when you log into the ATO’s Online Services and begin preparing your tax return.
“Once the knowledge we acquire is out there, all you have to do is verify it and add something that is lacking,” Mr Thomson mentioned.
What occurs if I’ve made a mistake on my return?
If you realise you’ve made a mistake after lodging your return, you can submit a request to have it amended.
This will be carried out by way of myGov or the ATO app, by sending a letter or by way of your tax agent.
When is my tax return due?
If you’re lodging the return yourself, you have until October 31.
Going through a tax agent can give you an extended deadline, which can be as late as May 15.
If you take this route, it is vital to recollect to ebook your appointment with a tax agent earlier than October 31 — however that does not imply you should see them by then.
What occurs if I miss the deadline?
You’ll still be able to lodge your return but you may cop a fine of $330.
There will also be a further $330 charge every 28 days the return is overdue.
While these expenses are capped, it might find yourself costing you as much as $1,650.
Why is my tax return so low this yr?
If you’ve already logged into the ATO’s online services to have a look at your tax refund estimate, you might have been surprised to find it’s not as big as past returns have been.
There could possibly be a number of causes for this:
- Your refund could have been offset against other debt you have
- There could be a difference between the details in your tax return and the pre-fill information data
- Your income and deductions are different from last year
- The discontinuation of the low- and middle-income tax offset (LMITO)
In past years, the LMITO gave those earning between $37,000 and $126,000 a benefit of up to $1,080, depending on how much they earned.
That was increased in the 2021/22 financial year, so anybody incomes between $48,001 and $90,000 acquired a $1,500 offset.
But the LMITO expired on June 30, 2022, meaning the tax returns of more than 10 million people shrank last year.
The identical goes for this yr’s refund — if it is feeling skinnier than earlier years, the lacking LMITO could possibly be accountable.
Why do I owe the ATO cash?
Similarly to a low return, there are many reasons why you could find yourself with a bill.
The most definitely culprits are that your revenue pushed you into the next tax bracket, and the Medicare levy.