Today marks the start of a new financial year and Australia’s ‘tax season’ and millions of Australians will be eager to receive a cash injection in the form of a tax refund.
So when is the best time to lodge your tax return for the 2024-25 financial year?
According to three experts, the “sweet spot” falls a few weeks after tax season starts.
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Mark Chapman, Director of tax communications at H&R Block, said mid-July to mid-August is usually the best time for Australians expecting a tax refund.
“The first week of tax season is basically just wasted time, because you’re not going to get your refund any quicker,” he told 9news.com.au.
That’s because the ATO doesn’t actually start paying refunds until about a week into the month, regardless of how early you lodge your tax return.
If you’re expecting a tax bill, however, it might be better to wait until closer to the October 31 deadline so you can save up extra cash to cover the bill.
“You don’t actually have to pay the tax until you lodge,” Chapman said.
Chartered Accountants Australia and New Zealand (CA ANZ) tax expert Susan Franks told 9news the best time to lodge your tax return may depend on your income sources.
“If you only earn salary or wages and interest, then just waiting a few weeks and lodging in August will probably be a safe sweet spot,” she said.
“If you earn some dividend income as well, you’d wait a little bit longer to maybe the end of September.
“And if you have investments in a unit trust, then you’d probably wait until October and lodge it before 31 October.”
CPA Australia Tax Lead Jenny Wong also cautioned Australians against lodging too early, as it can lead to mistakes.
A lot of pre-fill tax return information, including wages and interest, isn’t available until mid-July.
Individuals can fill out these details themselves if they don’t want to wait for the pre-fill information but those who do run the risk of getting it wrong.
“One of the biggest and most common mistakes taxpayers will make this tax time is rushing to lodge their returns early,” Wong told 9news.
Australians who lodge their tax return with incorrect information have to amend it, or risk incurring interest and penalties.
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But don’t wait too long to lodge your tax return.
Individuals who lodge their tax return themselves have until October 31 to get it in and those going through a tax agent must have appointed that agent by October 31.
“If you miss that deadline without lodging a tax return or appointing a tax agent, then you could be up for late lodgement fees,” Franks warned.
The experts also cautioned Australians against rushing the process of filling out their tax return, as it can lead to silly mistakes.
Chapman has seen people misspell their own names, or get a single digit wrong, when entering their bank account details, causing headaches down the line.
“Those practical issues do cause real problems and can very much lead to tax returns disappearing into the ATO system, into a black hole, potentially for several weeks.”
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
