5 reasons why lodging your 2019 tax return early isn’t a good idea
People generally rush to prepare their tax returns so they can get their tax refunds as soon as possible. Some may be able to have them lodged by the end of first week of July, so they can book a holiday overseas soon!
However, this year, it may be worthwhile to slow down a bit in lodging your tax returns.
ATO’s delayed commencement in processing 2019 tax returns
The ATO has announced that they will not commence processing 2019 tax returns until 5 July 2019 and refunds won’t be issued until 16 July 2019.
On top of this, there may also be delays initially due to the amount of tax returns lodged in the first week of July. The ATO is aiming to finalize 2019 tax returns within 12 business days but there is no guarantee.
Single Touch Payroll: how it affects your tax return lodgement
Single Touch Payroll (STP) is rolled out for employers to electronically lodge the payroll information directly to ATO. While it was not compulsory for all employers to be compliant with STP by 30 June 2019, most of the employers would be STP compliant by that date. As a result, the way your wages information is delivered to you may be different.
The ATO also allows employers to finalise their STP information until 31 July 2019 – which means that your payroll information may not be finalized by the time you prepare your tax return, and that what you have declared may be incorrect and an amendment is required later on.
Bank interest information incomplete
For returns that were lodged in July, we often find missing bank interest information when preparing tax returns and as a result it triggered ATO’s amendment, causing inconvenience to some clients.
Banks generally submit interest information to the ATO in July or August. Unless you have a very good idea about how much interest you earned in each of your bank accounts, it is a good idea to wait for the banks to submit their information before finalizing your return.
Investment funds annual tax statements are not available until August
Where you have investments in public managed funds, their annual tax statements are generally available late August, lodging early in July means you have omitted information in your tax return.
Proposed tax cuts not passed yet
In the 2019/2020 Federal Budget, the Government announced a series of personal income tax cuts, that will impact your 2019 tax return. However as these tax cuts are not likely to be passed until August 2019 (earliest), any tax returns that are lodged prior to the tax cuts are enacted will continue to use the current income tax offset amounts. It is expected that the ATO will automatically amend the returns to account for the extra income tax offset and provide refunds to individuals.
Too hard to deal with?
We are here to help. We have years of experience assisting individuals in preparing and lodging their tax returns and ensuring they are claiming their deductions correctly. Talk to us (or email us) and see what more we can do for you.