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Over 172k taxpayers rushed to lodge on 1 July despite warnings
Over 172,000 taxpayers jumped in early with this year’s tax returns despite multiple early lodgement warnings, prompting the ATO to issue yet another cautionary note.
Over 172k taxpayers rushed to lodge on 1 July despite warnings
Over 172,000 taxpayers jumped in early with this year’s tax returns despite multiple early lodgement warnings, prompting the ATO to issue yet another cautionary note.
The ATO received 172,000 individual 2021 tax lodgements on 1 July, well below the 740,000 lodgements it received on 1 July last year, but still one too many.
“We understand the rush to get a refund as fast as possible, but racing to lodge your return can often lead to easily avoidable mistakes,” ATO assistant commissioner Tim Loh said.
He advised taxpayers to avoid running into mistakes that could potentially delay their returns by waiting until their employers have finalised their income statements. While this is usually done by 14 July, this year, some employers impacted by COVID-19 have until 31 July.
“Waiting until the end of July to lodge allows the ATO to add information into your tax return from employers, banks, private health insurers and government agencies into your tax return. Agents can access this information too,” he explained.
“By allowing more time, your return will be easy, speedy and, importantly, more accurate. By avoiding mistakes, we’ll be able to process your refund faster,” Mr Loh said.
And while tax refunds are usually processed in under two weeks, Mr Loh warned it may take longer if the ATO needs to address any mistakes and potentially adjust returns.
Each year, the Tax Office typically adjusts more than 230,000 returns using third-party data, including from other government agencies, third-party providers such as financial institutions, and from e-commerce platform providers such as eBay, Airbnb, Uber and cryptocurrency exchanges.
According to Mr Loh, another common mistake associated with a rushed lodgement is incorrect personal data such as old bank account details.
“To avoid errors and delays, we ask that you double check all the information in your return before hitting submit,” Mr Loh said.
Last month, the CEO of the Institute of Public Accountants explained that the ATO will be looking at a plethora of data to determine whether a tax return lodgement is correct.
“It is no longer just interest, dividends and trust distributions that the ATO will be looking for,” Mr Andrew Conway said.
“Gains on property and cryptocurrency transactions, side hustles on e-commerce platforms, contractor services performed in sectors which have been previously found to be non-compliant, derivative trading etc are among the information that the ATO will compare with what has been lodged,” he cautioned.
As such, the IPA’s strong message is to “wait for the information to become available before you lodge”. On the contrary, taxpayers could expose themselves to an unexpected tax bill and angst down the track.
“We recommend not to rush in too early and seek advice from your public accountant if in doubt,” said Mr Conway.
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