As the end of the financial year approaches, many people eagerly anticipate lodging their tax returns to potentially receive a refund. However, lodging your tax return too early can lead to complications and inaccuracies. Here’s why you should consider waiting a few weeks after the end of the financial year before lodging your tax return.
1. Unfinalised Information from Employers
One of the main reasons to delay lodging your tax return is that the information from various entities, including your employer, might not yet be finalised. Employers have until July 14 to finalise their income statements. If you lodge your tax return before this date, there’s a risk that your income details will be incomplete or inaccurate. This could significantly impact your return amount and lead to complications down the line.
2. Delayed Reporting from Financial Institutions
Just like employers, banks and other financial institutions need time to finalise and report interest income and investment income to the Australian Taxation Office (ATO). This information is crucial for accurately lodging your tax return. If you lodge too early, there’s a chance that this data hasn’t been reported yet, leading to errors in your return.
3. Risk of Lodging Incorrect Information
When you lodge your tax return with incomplete or unfinalised information, there’s a high risk of errors. These errors can lead to either underestimating or overestimating your tax liability. If you overestimate and receive a larger refund than you’re entitled to, you may have to pay some of it back after lodging an amended return.
4. Need for Amended Returns
If you lodge your tax return early and later find out that some of the information was incorrect, you’ll need to lodge an amended return. This process can be time-consuming and stressful, especially if you’ve already received a refund based on the incorrect information. An amended return can also delay the finalisation of your tax matters and potentially lead to additional costs.
Best Practice: Wait a Few Weeks
To ensure that all the necessary information is available and accurate, it’s best to wait a few weeks after the end of the financial year before lodging your tax return. This allows time for employers and financial institutions to finalise and report their data to the ATO, reducing the risk of errors and the need for amendments.
At Readle, we understand the excitement of lodging your tax return and potentially receiving a refund. However, we recommend waiting to ensure accuracy and avoid complications. Our team of experienced tax professionals is here to help you navigate the tax return process efficiently and accurately. Get in touch with us at Readle to handle your tax return and make the most of your tax refund without the stress of errors and amendments.
Contact us today to schedule your appointment and ensure your tax return is in safe hands!