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  • Writer's pictureAnthony Cerantonio

Why you should delay your lodgement this year

With the end of financial year well and truly behind us, many of you will be preparing your 2020 tax returns for lodgement.

While many taxpayers who may have experienced loss of income due to COVID-19 will be eager to receive their refunds, as well as secure the $1,080 low and middle income tax offset (LMITO), tax authorities are urging Australian’s to delay lodgement.

COVID variables will impact the way lodgements are assessed this year, as well as the perimeters around what taxpayers can claim. JobKeeper, JobSeeker and the cash-flow boost, as well as safety equipment, working from home dedications and other pandemic-related variables are set to impact claims. The message from experts is to wait until more information is released, in order to maximise your 2020 return.

“Our strong message is to wait for the information to become available before you lodge; otherwise, you may end up with an unexpected tax bill and angst down the track. Discrepancies will create reverse workflow and expose taxpayers to interest and/or penalties,”

Andrew Conway, chief executive of the Institute of Public Accountants explains.

Furthermore, Australian’s who have lost employment and received JobSeeker will require Services Australia to load information into the pre-fill forms prior to lodging any claims themselves. Due to the JobSeeker stimulus being the first of its kind in Australian history, authorities are assuming there will be some hurdles to overcome when it comes to lodgement. Issues in correct amounts from employers being paid, and tax withheld, will all affect the refund amount to taxpayers. This also extends to Sole Traders receiving the Government package.

The overwhelming recommendation is for taxpayers to wait a few weeks before lodgement in order to save themselves the trouble of possible amendments and to ensure a maximised return.

Tax Institute’s senior advocate, Robyn Jacobson likewise explains that contrary to popular belief, it is not optimal to lodge your return as soon as June 30 ticks over. Third-party information, such as from banks, health insurance providers and public companies that have paid dividends, take a little while to come through to the ATO.

“If you rush to lodge your tax return early and not all the right information is available, you run the risk of making mistakes or inadvertently omitting income and having to amend your tax return. Why do your tax return twice when you can get it right the first time with a little patience?”

she explains.

Another motivation behind delaying is to ensure your employer has finalised your income tax information into the ATO’s single touch payroll. “It’s important to check that your employer has finalised the information in your income statement and it is marked as ‘tax ready’ before you lodge,” ATO assistant commissioner Karen Foat said.

Awaiting for all information to be correctly reflected with the ATO will mean an easier return, accurate refund estimation, as well as avoiding delays or a debt later on.

We at the Forensic Accounting Group recommend waiting until the first week of August to organise your 2020 tax return. Our team of experts are here for any questions leading up to then.

To book your appointment, or gain some insight in how COVID will impact your lodgement, please get in touch through the below;

+61 3 5280 8432

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