Australians are being warned to exercise patience when lodging their tax returns and be wary of tax-time loans this end of financial year.
Some 142,000 people had amendments or their returns investigated by the tax office in 2024 after jumping the gun before it was marked ‘tax ready’.
These were returns lodged in the first 2 weeks of July 2024.
Waiting a few extra weeks gives the tax office ample time to pre-fill important information.
“We pre-fill information from your employer, banks, government agencies and health funds into your tax return to help you get it right the first time – regardless of whether you use a registered tax agent or lodge yourself,” ATO Assistant Commissioner Rob Thomson said.
That little bit of extra time reduces the likelihood of mistakes or omissions which can lead to taxpayers having to submit an amendment – causing delays and issues.
The Tax Practitioners Board has also voiced concerns over tax time loans and how they might harm vulnerable members of the community.
This involves a tax practitioner, or associated lender, providing a short-term loan or advance on an estimated tax refund to a client.
Consumers could be hit with higher fees not fully transparent to the client, a failure of the practitioner in exercising reasonable care and unlawful behaviour when engaging in the practice.
“Tax practitioners must carefully consider their legal and ethical obligations and inform their clients of the potential risks when engaging in or recommending tax time finance,” board chair Peter de Cure said.
The Australian government introduced tax cuts from July 1, 2024 that will reduce the 19 per cent tax rate to 16 per cent and drop the 32.5 per cent rate to 30 per cent.
An increased threshold for which the 37 per cent tax rate applies has gone from $120,000 to $135,000, with another jump for those in the 45 per cent rate from $180,000 to $190,000.
More changes are on the way from 2026 when every taxpayer will receive an extra cut of up to $268 from July 1 and up to $536 every year from July 2027, compared to 2024–25 tax settings.
The ATO collected $577.4 billion in revenue in the 2022-23 financial year with just over half of that stemming from individual income tax ($298 billion).
Work-related expenses resulted in half of deductions claims by individuals with 10.3 million Aussies claiming a total of $28.3 billion – an average of $2739 per person.
Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national newswire and has been delivering accurate, reliable and fast news content to the media industry, government and corporate sector for 85 years. We keep Australia informed.
