A quick tax refund is tempting, but the ATO says there is a reason waiting a few weeks can make a difference.
Tax returns lodged in the first days of July can reach the Australian Taxation Office before key income, bank and government payment details have been added.
That can increase the risk of mistakes, delays and changes to a return after it has been lodged.
The warning is useful for Moree Plains residents hoping for a quick refund as the new financial year begins.
During the 2024–25 financial year, the ATO said early lodgers were more than twice as likely to have their returns changed.
Chasing a quick refund? ATO says lodging too early can backfire. Image: Mikhail Nilov/Pexels
It said more than 140,000 individual returns were corrected for issues including employment income, interest, dividends, welfare payments, Medicare levy exemptions and private health insurance.
The ATO said more than 595,000 individual returns were also adjusted through ATO data matching after missing income, overstated deductions, tax credits and other differences were found.
Boyce Business Unit Leader Jono Hart said the firm saw people keen to lodge individual tax returns in the first days of July each year.
“I understand it, especially if you are well prepared, implemented some tax planning actions and know you are getting a refund,” Mr Hart said.
“The catch is that lodging on 1 July can lead to missing information, and it can actually slow things down.
“A little patience now usually gives you a smoother and more accurate result down the line.”
Mr Hart said one of the biggest mistakes was lodging before income statements were marked “tax ready” in myGov, and before the ATO had loaded the information it already has.
The ATO recommends waiting until late July, when most of that information is usually available.
Mr Hart said late July was generally safer for most taxpayers because wages, bank interest, health cover and government payments were more likely to have been added by then.
People with more complex tax affairs, including investments, trusts or farming businesses, may need to wait longer or speak with their adviser about timing.
Mr Hart said taxpayers could still make good use of early July while they were waiting to lodge.
Workers can use that time to gather receipts, check work-related expenses, review any car travel or work-from-home records, and collect details for union fees, professional fees, donations and private health insurance.
Sole traders, contractors and small businesses should check June invoices and statements, make sure their books are up to date, and gather business income and expense records.
For primary producers, Mr Hart said it was also a good time to prepare stocktake, grain-on-hand and livestock-on-hand figures.
Mr Hart said taxpayers should take care with deduction areas such as working-from-home expenses, car expenses, clothing and laundry claims, and the “$300 without receipts” rule.
Taxpayers still need to have spent the money and be able to explain the claim.
“The ATO sticks to three golden rules,” Mr Hart said.
“You must have spent the money yourself and not been reimbursed.
“The expense must directly relate to earning your income.
“And you must have a record to prove it.”
Before lodging, taxpayers should check their personal and bank details, make sure income statements are marked tax ready, wait for bank interest and government payments to appear, and gather records for any deductions they plan to claim.
Most people who lodge their own return have until October 31, while people lodging through a registered tax agent may have longer.
General information only. Taxpayers should seek advice about their own circumstances.
Moree Online News thanks Jono Hart from Boyce for his comments when preparing this article.
