Why being an early bird doesn’t pay when filing your tax return

The prospect of a juicy tax refund is tempting, but being an early bird could hurt you.

The prospect of a juicy tax refund is tempting, but being an early bird could hurt you. Photo: TND

The new financial year is upon us and that means millions of Australians are rushing to file their tax returns for the 2022-23 year.

But while the prospect of a lucrative tax refund is tempting, the tax office is urging people to hold off and be patient – advising that it’s actually best to wait a while before filing your tax return.

That’s because much of the pre-fill information about your annual income takes a few weeks to make it from your employer to the Australian Taxation Office (ATO), meaning early birds won’t be able to take advantage of a streamlined process that pre-fills most of their tax information.

And that could make the ATO take longer to process your return, or ask even more questions.

“While you can lodge from July 1, there is a much higher chance that your return will be missing important information if you lodge your return before late July,” ATO assistant commissioner Tim Loh said.

“If you forget to include everything, it will slow down the progress of your return, and you’ll likely end up with more work to do down the track.”

It’s not just your boss, either. Health funds, banks and government agencies all need to hand information over to the ATO to ensure the hardest parts of your tax return are done for you.

Mr Loh likened the process to baking a cake, funnily enough.

“If you tried to bake a cake in an oven that wasn’t pre-heated, you’d end up with a half-baked disaster,” he said.

“Lodging your tax return before everything is ready is similar. Be patient, wait for your data to be pre-filled, and you’ll end up with a perfectly baked tax return.”

Don’t copy and paste

The ATO says “late July” is usually long enough for pre-fill to be available, so that means waiting for another few weeks yet – though you can log into MyGov to check what pre-fill data is available now.

When you do file your 2022-23 return, the ATO is warning taxpayers not to copy and paste the same expense information from last year because so much has changed.

That includes work from home expenses, which need to be lodged under a revised fixed rate method because the COVID era shortcut method has been axed.

TND has explained how that method works in an earlier story here if you’re confused.

There are also three ‘golden rules’ for any Australian attempting to claim a work-related deduction:

  • Have you spent the money yourself? If not, then re-imbursements can’t be claimed
  • Does the expense relate directly to earning an income? It can’t be a private expense
  • Can you prove it? The ATO requires evidence for purchases such as receipts.

Mr Loh said there were 40 occupation and industry specific tax guides on the ATO’s website to get an idea of what can be claimed as a work-related expense this year.

“We want people to get their deductions right on the first go and claim what they are entitled to – nothing more, nothing less,” he said.

“Some occupations have expenses that are specific to their occupation. For example, flight attendants can claim rehydrating moisturisers and nurses can claim stethoscopes.”

You have until October 31 to file your tax return for 2022-23.

That deadline could be extended if you have a registered tax agent doing your return, but you must engage them before October 31.

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