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Tax Returns: What Australians Need to Know for the 2024-25 Financial Year
As the new financial year gets underway, Australians can now start lodging their tax returns for the 2024-25 year. There is a long window of opportunity to claim potential refunds from the Australian Taxation Office (ATO), but experts warn that submitting your return too early can lead to several issues.
Important Deadlines for Tax Lodgement
Aussies can submit their tax returns from July 1 to October 31 if they are managing the process themselves. Those using an accountant may enjoy extended deadlines. However, tax expert Hripsime Demirdjian, founder of Hive Wise, advises against rushing the process.
Demirdjian highlights that by July 1, the income reports submitted to the ATO are often incomplete. Essential documents from employers, banks, insurance providers, and other financial entities may not yet be available. For example, employers have until July 14 to finalise payroll data and send it to the ATO. Therefore, lodging a return before this deadline could result in submitting inaccurate information.
Risks of Early Tax Lodgement
Filing prematurely can lead to missing important deductions and potentially flagging your return for an ATO review. This action may delay processing times as the ATO has to rectify any missing income information. In fact, last year, around 142,000 returns lodged within the first two weeks of July required amendments or prompted investigations by the ATO. Thus, experts generally recommend waiting until mid to late July to lodge tax returns for a smoother experience.
Demirdjian identifies mid-July as a "safe zone" for individuals without complex investments. For those with complicated financial portfolios—such as managed funds—it’s wise to postpone lodgement until August or September, as data might not be ready.
Preparing for Tax Time
While waiting is advisable, taxpayers can utilise this time effectively by preparing their documents. Demirdjian suggests gathering end-of-financial-year statements and receipts for work-related expenses to ensure optimised deductions.
The ATO provides occupation and industry-specific guides that outline potential claims for various professions. You may be eligible for a refund if you overpaid taxes throughout the financial year. A Finder survey indicates that over 10 million Australians are anticipating refunds this year, with an average expectation of around $1,519.
Tax Return Processing Timelines
Upon lodgement, the ATO usually processes online submissions within two weeks, while paper returns can take up to ten weeks. After processing, taxpayers receive a notice of assessment from the ATO, outlining whether they are entitled to a refund or if they owe taxes.
In summary, while it is tempting to submit your tax return early to secure a refund, waiting until all income data is confirmed will help avoid unnecessary complications. Keeping organised records will enable a smoother process come tax time.
By following these guidelines and being well-prepared, Australians can make the most of their tax return experience this financial year.
