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Why you shouldn’t lodge your tax return early this year

Taxpayers have been promised a bigger refund by the newly re-elected Liberal Party, but those who race to lodge could end up with a headache on their hands.

One of the major promises Prime Minister Scott Morrison took to the election was a tax break for low to middle income earners, effective from this tax time.

However, as noted by the Institute of Public Accountants (IPA), the Liberal Party still needs to pass these changes through Parliament.

If the government is to pass these tax changes, eligible taxpayers can receive up to $530 for singles or $1,080 for a couple.

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What would early lodgement mean?

If the laws aren’t changed at the time a taxpayer lodges, they won’t get the return promised at the federal election.

However, the ATO has previously stated that it can amend any tax return if the laws change, without the need to re-lodge.

Further, a new way of paying workers will soon be mandatory for most Australian businesses - it’s called single touch payroll. Employers need to complete a finalisation process for all information to be accurate, meaning taxpayers who act before this information is available could be using out of date information.

Additionally, third-party data such as dividends, interest and share disposals will also not be uploaded to the ATO’s systems until July, which impacts the accuracy and availability of pre-filled data on a tax return.

Taxpayers have been reminded that the tax system relies on self-assessment, so they need to take personal responsibility for their tax return, including any data which is pre-filled.  

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Why you shouldn’t lodge your tax return early this year
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Cameron Micallef

Cameron Micallef is a journalist at Nest Egg, writing primarily about personal wealth and economic markets. 

Prior to this, Cameron worked for Australian Associated Press. He graduated from the University of Wollongong with a double degree in communications and commerce.

You can contact him on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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