Rush to get tax return in for a quick refund may be costly

Erin Lyons, News Corp Australia/The West Australian
Taxpayers have also been urged to ensure their employers have finalised their income statement and it is tax ready before they lodge a return.
Taxpayers have also been urged to ensure their employers have finalised their income statement and it is tax ready before they lodge a return. Credit: WA News

According to the Australian Taxation Office, many people forget to include all sources of income, which is the number one reason tax returns and refunds are delayed.

“We know people are eager to get their hands on their tax refund, as we had over 172,000 individual 2021 tax lodgements on July 1,” assistant commissioner Tim Loh, pictured, said.

“We understand the rush to get a refund as fast as possible, but racing to lodge your return can often lead to easily avoidable mistakes.

“Waiting until the end of July to lodge allows the ATO to add information into your tax return from employers, banks, private health insurers, and Government agencies into your tax return. Agents can access this information, too.”

Taxpayers have also been urged to ensure their employers have finalised their income statement and it is tax ready before they lodge a return.

This is usually done by mid-July but because of COVID some people will have to wait until the end of the month.

Mr Loh said people must include and declare any income that has not been prefilled.

“By allowing more time, your return will be easy, speedy and, importantly, more accurate. By avoiding mistakes, we’ll be able to process your refund faster,” he said.

“Four out of five people get refunds at tax time. While we usually get these out in under two weeks, it may take longer if we need to address any mistakes and potentially adjust your return.”

Every year the ATO has to adjust more than 230,000 tax returns using third-party data.

Many people who lodge before the data is available fail to include all their income and need to repay part or all of their refund.

The second most common reason for a tax return delay is the ATO not knowing where to send the refund because taxpayers have not updated their bank account details.