Why You Shouldn’t Rush to Lodge Your Tax Return

The tax deadline is fast approaching, and you might be tempted to get your return in as soon as possible. But hold on. Rushing your tax return this month could increase your chances of it being flagged by the Australian Taxation Office (ATO) for errors.

Here's why taking your time and ensuring accuracy of your tax returns is crucial.

Reduce your risk of an ATO review

Throughout the year, you might receive income from various sources like banks (interest), investments (dividends), or even side hustles. It's important to include all this income in your tax return.

The ATO receives information from banks and other institutions, so any missing income will be a red flag. Waiting until later in the tax season to lodge returns allows more time for all your income details to be pre-filled by the ATO, reducing the chances of errors or omissions.

Claim the right deductions and avoid getting flagged

Thinking about claiming deductions for work-from-home expenses, rental property maintenance, car usage, or self-education? The rules for these deductions can change from year to year, so using the wrong method could get your return flagged.

Waiting a bit allows you to confirm the latest rules and claim deductions accurately. This is especially important for deductions related to:

• Rental properties: Ensure you understand what's claimable especially when claiming for maintenance costs.
• Car expenses: Double-check the applicable rates for depreciation or cents per kilometre
• Self-education expenses: Make sure your courses qualify and you meet eligibility requirements.
• Working from home deductions: Understand the current rules for claiming expenses related to your home office.
• Depreciating assets: The process for claiming depreciation on assets like equipment may have changed. So make sure to check on this before you file claims.

Don’t miss out on deductions for your super contributions

There are a couple of important things to remember when claiming a tax deduction for your super contributions:

• Notify your super fund: Before lodging your tax return, make sure you've notified your super fund about the amount you want to claim as a deduction, and they need to acknowledge it.
• Don't roll over your super before claiming: If you plan to claim a deduction for super contributions, don't roll your super to a new fund before you lodge your tax return. Doing this could prevent you from claiming the deduction.

Avoid costly mistakes

While most mistakes are unintentional, remember that deliberately claiming expenses you're not entitled to can have serious consequences. This includes penalties and even legal trouble.

So, what can you do?

Remember, honesty and accuracy are key when dealing with the ATO. Here’s what you can do to maintain your financial integrity and avoid any potential issues.

• Review your records: Take some time to gather and review all your income statements, expense receipts, and superannuation contribution details.
• Understand your tax obligations: The ATO website has a wealth of information to help you understand what you can and can't claim.
• Seek professional guidance: If you're unsure about anything, consider consulting a registered tax agent for professional advice and service.