As the new financial year has commenced, Australians are preparing to submit their tax returns for the 2024-25 fiscal period. While many are eager to receive their tax refunds from the Australian Taxation Office (ATO), experts caution against rushing the lodgement process too early.
Individuals have until October 31 to file their tax returns independently, with extended deadlines available for those who opt to utilise the services of an accountant. Hripsime Demirdjian, founder of Hive Wise, advises caution when submitting returns. She informed Yahoo Finance that lodgement on July 1 could lead to complications due to potentially incomplete income reporting from various sources including employers, banks, and government agencies.
Notably, employers are required to finalise payroll data and submit it to the ATO by July 14, meaning salary information in a taxpayer’s ATO prefilling report may not be complete if lodged earlier. This could result in errors on tax returns, missing out on eligible deductions, and possibly triggering reviews by the ATO, which can delay processing.
The ATO suggests waiting to lodge until income statements are marked ‘tax ready’ to ensure all data is accurately pre-filled. Last year alone, approximately 142,000 people who lodged in early July had their tax returns reviewed or amended due to inaccuracies.
Although technically possible to submit returns from the start of July, experts recommend delaying until mid-July for a smoother process. For salaried employees without complex financial circumstances, this timing is often suitable. Conversely, those with intricate financial scenarios involving investments should consider waiting until late August or September, as relevant data is typically unavailable until then.
Demirdjian also encourages taxpayers to prepare in advance by gathering necessary documents and end-of-financial-year statements. Compiling receipts and invoices related to work expenses helps maximise deductions when tax time arrives. The ATO provides specific guides to assist individuals in identifying applicable tax deductions tailored to their occupations and industries.
A recent Finder survey reveals that over 10 million Australians anticipate a tax refund this year, with the average expected refund estimated at $1,519. The ATO typically processes online and agent-lodged returns within two weeks, while paper submissions may take around ten weeks. Following processing, taxpayers will receive a notice of assessment, detailing whether they are owed a refund or if taxes are due.
In summary, while the eagerness to lodge tax returns is understandable, it is prudent for Australians to wait until their financial information is complete to avoid mistakes and potential delays. By preparing in advance and ensuring all data is accurate, taxpayers can enhance their chances of achieving a seamless lodgement process and a timely refund.
