As tax season approaches in Australia, many individuals are eager to file their returns in hopes of receiving refunds promptly. Experts warn that filing a tax return too soon could result in unnecessary wait times and confusion. Mark Chapman, the director of tax communications at H&R Block, advises taxpayers to hold off until at least the third week of July. Aligning this timing can create a much more seamless experience.
The Australian Taxation Office (ATO) has confirmed it will not start processing refunds until the second week of tax time. That’s because returns filed in advance might end up in a “black hole” and be at risk of being further delayed. Chapman emphasizes the importance of waiting, stating, “There are really two reasons [to wait]. First, the ATO isn’t even going to process refunds until the second week of tax time.” He adds that “the pre-filled information which the ATO relies upon…is often not available for the first couple of weeks of July.”
Finder‘s recent survey found that almost 47% of Australians are expecting a tax return this year. Based on nearly 1,015 responses, our annual transportation infrastructure survey found that respondents had a wide range of plans for the expected money. Of people surveyed, 19% are going to spend their tax refunds on paying down household bills. 7% say they’re putting money away for pleasures such as vacations. Five percent of Americans say they’ll use their refunds to fund shopping sprees. In a surprising turn, six percent plan to use their funds to pay off their mortgage.
Chapman advises filing lodging tax returns during the third week of July when pre-filled data is usually ready. He cautions, “If you lodge in the first two weeks, you run a real chance of basically missing income from an employer or bank interest and then having to do an amendment later on.” This is particularly needed as taxpayers usually receive income from various different sources. When that’s the case, it’s easy to shortchange some sources of revenue.
Chapman to remind taxpayers to reconfirm all their personal and financial details directly with the ATO. This is an important step toward ensuring all filers have a simple and easy filing experience. “Don’t assume the ATO pre-filled data is correct or complete, particularly if you’re lodging early,” he warns. Problems like mismatched names or addresses may lead to returns being stalled at the ATO. “Returns routinely get held up at the ATO because there’s some kind of data mismatch between what you’ve reported and what information the ATO has,” Chapman explains.
Self-lodging paper tax returns are due on October 31. If you require assistance from a tax agent, you are granted until May 15 of the following year to file. Chapman’s advice — hold off until late July to see how the field shapes up. Such an approach would be more likely to result in a faster refund and reduce the chances of costly issues arising.
“Your employer has until July 14 each year to finalise your payroll data and submit it with the ATO, and without this information, it’s really hard to complete your return.” She stresses that organizations deserve adequate time to complete their audits and release their financial statements. From there, they then pass this information along to the Australian Tax Office (ATO).
