Tax return windfall: Australians receive $5.3 billion in record-breaking time

Now is the "perfect time" to lodge your tax return, according to the ATO.

Now is the "perfect time" to lodge your tax return, according to the ATO. Photo: Getty

More than $5.3 billion have poured into the economy over the past three weeks after Australians rushed to file tax returns amid lockdowns in New South Wales, Victoria and South Australia.

The tax office has processed 2.1 million claims in less than a month – a record-breaking effort that has paid $2494 on average to Australians navigating rising cost-of-living pressures and COVID-19 restrictions.

ATO assistant commissioner Tim Loh told The New Daily he was immensely proud of the effort and that it was “great for the economy”.

“People are in lockdown – they’ve got time on their hands and they need money,” Mr Loh said of the new record.

The average return is up $129 on last year and is now more than 10 per cent higher than before the pandemic when work-from-home deductions were less generous.

Institute of Public Accountants senior tax adviser Tony Greco said it was a bumper year for Australians looking for a tax windfall.

“There’s a lot of money on the table,” Mr Greco told The New Daily.

“There’s the stage-two tax cuts, which for most people kicked in in November, so you had four months [before that] that went into returns.

“Then you’ve got working-from-home deductions, which is worth a $1500 deduction for some people.”

The introduction of the low and middle income tax offset (LMITO) in 2019 has added an extra $1080 to the deductions of more than 10 million Australians at tax time.

In 2018-19, before the LMITO was created, just $879 million was refunded to 389,000 people in the first two weeks of July.

The year’s rush has once again contradicted the advice of the ATO to wait until the end of July to lodge, with pre-fill information often unavailable for those who lodge returns before then.

But during a pandemic many people are eager to bolster their budgets as soon as possible, UNSW associate professor Ann Kayis-Kumar said.

Dr Kayis-Kumar, director of UNSW’s free tax assistance clinic, said accountants had experienced much higher demand during early July.

“It’s an issue around cash flow timing, so it’s a symptom of a bigger problem,” she told The New Daily.

Tax return: It’s time to lodge

The ATO’s Mr Loh said now was the “perfect time” to lodge your return if you haven’t already.

“A lot of people’s pre-fill information has arrived,” he told TND.

“It’s going to make it really easy and simple for people to lodge.”

It takes less than 10 business days on average for the ATO to pay a refund once it’s been filed – although delays can sometimes occur.

That means if you file today, you should receive your money some time in August.

To get the most out of your return, check out The New Daily’s guide to making claims in general and its advice on work-from-home expenses in particular.

With lockdowns affecting much of 2021, Mr Loh said work-from-home claims had risen once again, after 4.4 million Australians lodged home office expenses in 2019-20.

Last year about a quarter of taxpayers used the ATO’s standard 80 cents per hour work from home deduction, which allows you to claim expenses at a flat rate based on the number of hours you worked at home.

“What we want to do is make it really easy for people working from home for the first time to claim those WFH expenses,” Mr Loh said.

“All you have to do is work out the number of hours you’ve worked from home.”

The ATO is also watching closely this year for tax return claims related to travel and work uniforms, particularly for taxpayers that lodge large numbers of work-from-home hours.

Bitcoin and other cryptocurrencies are on the agenda too, with a new enforcement agenda under way at the ATO to ensure digital currencies are treated as assets under the tax umbrella this year.

Topics: Tax return
Stay informed, daily
A FREE subscription to The New Daily arrives every morning and evening.
The New Daily is a trusted source of national news and information and is provided free for all Australians. Read our editorial charter.
Copyright © 2024 The New Daily.
All rights reserved.