Don’t rush to lodge too early this tax time!

With the end of the financial year upon us, plenty of Australians will be tempted to lodge their tax return on 1 July to tick that job off the list, or to chase a refund to help with cost of living pressures. However, the ATO has a clear message this year: slow down and get it right. ATO figures show that early lodgers are far more likely to make mistakes, but patience and taking time to get all your financial information together usually leads to a smoother result.

What’s pre-fill, and why does it matter?

Pre-fill is the ATO’s system for automatically populating your tax return with information it receives from third parties. The ATO pre-fills information from your employer, banks, government agencies and health funds into your tax return to help you get it right the first time.

If you wait until late July to lodge, most pre-fill information should be available. In practice, this means much of the information about your wages, bank interest, government payments and private health insurance details will be pre-filled. You can (and should!) still check it against your own records, add anything that is missing and include any deductions or offsets you’re eligible for.

The catch is timing. While some pre-fill data trickles through from 1 July, most reporting and information is finalised later in the month. Lodging before this data lands means you’re doing the work the ATO’s systems would have done for you, and you risk leaving income off your return or making other errors, meaning your return could need adjusting and take longer to process.

The numbers speak for themselves

Last financial year, the ATO corrected more than 140,000 individual tax returns where discrepancies appeared in areas like employment income, interest, dividends, welfare payments, Medicare levy exemptions and private health insurance. The broader compliance picture is just as telling. The ATO’s data matching program adjusted more than 595,000 individual tax returns due to missing income, overstated deductions and tax credits and other discrepancies.

How to use the wait wisely

Holding off until later to lodge doesn’t mean doing nothing. While you wait for pre-fill to be complete, you can:

• check your contact details and bank account information are up to date, so corrections after lodgment don’t delay your refund;

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  collect receipts, logbooks and any private health insurance details so you have them ready to check against pre-filled information;

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  review the ATO’s occupation guides to confirm which deductions apply to your line of work; and

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  download or check the ATO app to track employment income, store your expense records and receive ATO account notifications.

Check before you click “lodge”

Once pre-filled data is available, don’t just accept it on face value. Cross-check the figures against your own records, particularly for bank interest, dividends and government payments. If something looks wrong, contact the provider so corrections can flow through to the ATO.

If you’ve already lodged and made a mistake

Mistakes happen. If you realise after lodgment that something’s missing or incorrect, you can fix it through the ATO online amendment process via myGov once the original return has been processed, or by speaking with your registered tax agent.

Source: www.ato.gov.au/media-centre/over-595000-tax-returns-adjusted-as-ato-warns-against-early-lodgment