Yahoo Finance Major $1,288 warning for Aussies lodging their tax returns
The Australian Taxation Office said people were twice as likely to have mistakes if they lodged early.
It's the start of the new financial year and millions of Aussies are now able to submit their tax returns for the 2023-24 year. But there's a big reason why you shouldn't send your tax return off to the Australian Taxation Office (ATO) today.
With the cost-of-living crisis gripping everyone's wallets, a decent portion of the population will be relying on their tax return to provide a bit of financial relief. Finder personal finance expert Sarah Megginson told Yahoo Finance she expects the ATO to be flooded with early tax return lodgements.
“People will be desperate to get their hands on their refunds with some needing it just to keep the lights on," she said. “It’s possible that a tax windfall could make life a lot more comfortable in the short term for millions of households.”
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Why you shouldn't lodge your tax return on July 1
While people can send off their tax returns to the ATO from today, there's a chance they will be missing some key details, and that will create headaches for everyone involved.
ATO assistant commissioner Rob Thomson revealed those who submit their tax returns in the first few weeks of July were twice as likely to make a mistake.
Hive Wise chartered accountant Hripsime Demirdjian explained why you should hold out before lodging.
"If you are a salaried employee, your employer has until the 14th of July to finalise your 2024 payroll data with the ATO," she said in a video.
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"So if you go and lodge your tax return on the first of July, you will be basing it off of incomplete and unfinalised payroll data ... so the outcome of your tax return that you lodge on the first of July will maybe be incorrect if things change on your employer's end."
She added that if you have investments in managed funds, as an example, that information for the whole financial year isn't usually available until "the end of August, September, or sometimes even later than that".
"So you want to make sure that you have all [your] information ready before you even go and start lodging your tax return," Demirdjian said.
The ATO revealed that forgetting to include interest from banks, dividend income, payments from government agencies and private health insurance details are among the most common mistakes people make during tax time.
How much will I get from my tax return this year?
The average Aussie is expecting to receive a tax refund of $1,288, but that will obviously depend on your income, deductions and whether you have any investments or other salary streams.
But Demirdjian warned Aussies to not have huge expectations about their tax returns.
"If you are a salaried employee, your employer is already withholding tax on your behalf from your wages in each pay cycle," she said.
"So when it comes time to do your tax return, and assuming you have no other sources of income, and no major deductions, well, then the outcome of your tax return should essentially be like zero.
"Don't expect a big, chunky refund if you don't have major deductions to kind of offset that income."
If you're doing your tax return yourself, check your income statement from your employer is marked as “tax ready” and your pre-filled information is available in myTax before lodging.
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