Just 11 days after tax season opened for the financial year, more than a million impatient Australians had lodged their tax returns with the Australian Taxation Office.
That figure was more than 500,000 than the same time last year, and there was one very clear reason why people were rushing to do their taxes (something people generally put off): people were hungry to receive their tax cuts.
And while earlybird lodgers saw their tax refunds hit their bank accounts from 12 July, there will some that will never get those promised tax cuts.
Best time to lodge: Don’t lodge your tax return too early, ATO warns
In the future: Coalition’s income tax cuts: What’s coming up next?
The reason why is because that sum is automatically being used to pay off Centrelink or child support debts – and you might not even know you have them.
“Unfortunately for taxpayers, this information is normally not known until they receive their notice from the ATO that their return has been processed,” accounting firm Carbon Group partner Michelle Maynard told news.com.au.
While you can revise this information as the year goes on, a lot of people don’t and they simply ‘set and forget’, she added.
And with Centrelink’s robo-debt program, which automatically calculates a debt based on a computer algorithm, people who don’t actually owe money could be told they owe an outstanding debt.
Also, when you do your tax return, myGov doesn’t tell you how much debt you’ve got, leaving people in the dark about a debt they never knew they had.
“A lot of people spend that money before they get it,” said Maynard.
“You get your notice of assessment saying this has been forwarded to the Department of Human Services, and only then a few weeks later you get a letter from Centrelink.”
What you need to know about the tax cuts
The accounting firm partner said that many Australians thought they would be getting $1,080 – but this just isn’t the case.
For one, how much you’ll get depends on how much you earn: only those who earn between $48,000 and $90,000 will get the full $1,080 sum.
How much will you get back? 4.5 million Aussies will get $1,080 back – are you eligible?
Deductions: What can I claim on my tax return?
But if you earn more or less than that you’ll get anywhere between $0 and $1,080.
Also, the tax cuts aren’t a top-up bonus sum; it’s tax offset, meaning it’ll either ease your tax burden, or be a nice sweetener.
“There are definitely a lot of misconceptions. People think it’s like the Kevin Rudd payment, we all just get it into our bank account, but it’s not. It’s a non-refundable tax offset,” said Maynard.
It’s part of your tax return, if you’re getting one, so there won’t be any extra payment: it’s all lumped into the one sum.
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