Lodged Tax Return, this year on 1st July over 170,000 taxpayers rushed to lodge their tax return. Despite this, the Australian Tax Office (ATO) has warned of common mistakes that could potentially result in some Australians have their refunds adjusted.
The ATO confirmed that 172,000 individual tax lodgements were received on 1st July 2021. These figures are just under a quarter of the 740,000 lodgements it received in its “biggest 1st July ever” last year.
When discounting the events of the covid-19 pandemic that led to the huge increase in 2020, the figures for 2021 are still an increase from the 100,000 lodgements that were made on 1st July 2019. This has come despite the ATO announcing that it would only commence the full processing of tax returns from 7th July this year.
This means that tax refunds are only expected to flow from Friday 16th July this year.
The huge number of early lodgements made by Australian taxpayers has come despite the fact that the ATO has given employers across the country until the end of July to complete their Single Touch Payroll finalisation declaration as a result of the covid-19 pandemic.
The ATO has said that lodging before income statements are finalised was an easy way to run into mistakes that could slow down refunds.
“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,” says ATO assistant commissioner Tim Loh.
“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.
“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.”
According to the ATO, an excess of 230,000 lodged tax return are adjusted each year using third-party data, with individuals commonly failing to include all their income, including interest, dividends and rental income.
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 the ATO needs to address any mistakes and potentially adjust the taxpayers return.
To avoid errors and delays, it is crucial for taxpayers to double check all the information in their tax return before hitting the submit button.
The Australian Tax Office (ATO) has given a warning to taxpayers who choose to “copy-paste” work related expense claims, like those accumulated when travelling between work sites, or laundering uniforms, while they have been working from home.
Although the majority of Australians are doing the right thing, the ATO has reassured tax payers that the tax agents data analytics will be on the lookout for any unusually high claims that are made at tax time.
The ATO is especially wanting to crackdown on instances where a person’s tax deductions are much higher than other workers who are in a similar job that pays a similar amount of income. The ATO also plans to look closely at anyone who has significant working-from-home expenses that maintains or increases their claims for things like car, travel or clothing expenses.
You cannot simply copy and paste previous year’s claims without evidence. However, the ATO is aware that some of these unusual claims may be legitimate. So, if you explain your claim with evidence, you have nothing to fear.
According to the ATO, close to 8.5 million Australians claimed nearly $19.4 billion in work-related expenses for the 2020 income year.
The ATO pointed to 2020 data that showed the value of car and travel expenses decreased by nearly 5.5 percent, while the value of clothing expense claims saw an increase of about 2.6 per cent, as frontline workers were faced with “first-time” expenses for items like face masks and sanitiser.
The pandemic forced swathes of the workforce to work from home, work-related expenses are expected to spike for the 2021 income year. Despite this, taxpayers should be aware that some expenses, like travel, might not be eligible.
Lodged Tax Return, Australian Government Plans To introduce New Gig Economy Reporting Regime
Share economy participants across Australia will no longer be able to avoid their tax obligations as the federal governments announces plans to legislate a new compulsory reporting regime.
The new reporting regime means that share economy platforms such as; Uber, Airbnb and Deliveroo will all be required to report information of every transaction to the ATO, in the same way the taxable payments reporting system (TPRS) is being currently applied across a number of industries.
Transactions associated with ride-sourcing or a short-term accommodation service will be first in line for the reporting regime, with share economy platforms required to report these transactions from 1st July 2022.
All other share economy transactions will fall under the new reporting regime from 1 July 2023.