The Australian Tax Office (ATO) wants taxpayers to be aware that filing their tax returns early may not be the best option. While you can begin filing returns as early as 1 July, you run the risk of making mistakes as not all required information will have been pre-filled at this time. Over 140,000 taxpayers that lodged returns last year had their returns amended due to this issue as the ATO had yet to issue their tax assessments.
According to Assistant Commissioner Tim Loh, the ATO tends to see more mistakes when taxpayers and agents rush to file returns early and that this increased the chances of delays when it came to refunds and having returns later adjusted. He noted that if a taxpayer forgot to include all relevant information, they could end up having to answer questions from the tax office.
Loh confirmed that prefilled information tended to keep coming in until the end of July. This information could include wages, interest from banks, and health insurance data. Institutions such as employers, government agencies, banks and health funds forward their data until around late July, meaning that this is when you can expect prefilled information to have been automatically loaded on the returns. He recommended waiting a few weeks before filing so that all information could be pre-filled, making lodgement faster and easier.
Information that many taxpayers tended to forget was interest income from bank accounts and dividends from shares investments. While this is data they may neglect, it will eventually be forwarded to the ATO and loaded to returns.
It is helpful for taxpayers to wait until all their incomes have been entered before lodgement to avoid problems like having their returns adjusted or suffering a delay in the payment of refunds. The risk of such issues arising and returns being adjusted is higher for taxpayers that opt to file in early July rather than wait.
Taxpayers should wait for pre-filled information to be loaded and their income statements to be marked “tax ready” before filing. This can be checked through the ATO app or online services of myGov.
Loh said that those that waited for pre-filled information to be loaded were less likely to have their returns amended. amendments that were made later could result in tax debts for those that filed too early. The ATO has also advised that for those that feel the pre-filled information should be amended, they would need to provide appropriate records to support such corrections.
For taxpayers who believe or recognise they may have made a mistake with their returns, the ATO recommends going through the ATO online amendment process through myGov to make corrections. If the ATO finds it was a genuine mistake, they will communicate to the taxpayer the correct method so they can avoid repeating the same and any penalties unless the mistake was unduly reckless.
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