ATO warning ahead of $1,288 cost-of-living cash boost: 'Shooting yourself in the foot'

Yahoo

26-05-2025

Millions of Australians will soon be able to lodge their tax returns with the Australian Taxation Office (ATO), and many will be given a decent cash boost in the form of a tax refund. However, Aussies have been urged to go slow and make sure everything is filled out correctly.
Financial institution CPA Australia said too many people leap at the opportunity to submit their tax returns on July 1, which is the first day you're permitted to do so. But CPA Australia's tax lead, Jenny Wong, said this wasn't the best idea.
'Firing the starting pistol on your tax return too quickly means you could end up shooting yourself in the foot," she said.
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'There's a misconception that lodging early means you'll receive your refund first, but it's not as simple as that.
"It's common for people who lodge early to end up having to amend their returns later anyway, so it's best to wait. It'll save you in the long run.'
She said the cost-of-living crisis had understandably made some people desperate for this tax refund.
Finder data from last year revealed the average expected refund was $1,288 per person.Almost one in four people were planning on using that money to pay for an essential expense like a household bill or insurance.
A further 4 per cent said they would put it towards their credit card debt, while one in 10 would chuck it on their mortgage.
While you might want to get your refund as fast as possible, you need to wait until your employer and private health insurer have provided the necessary details so that your tax return contains all the right information.
That can take several weeks, so you might have to wait until late July or early August to lodge your tax return.
CPA Australia also said you need to make sure your tax return was reflective of what you've spent and earned in the last 12 months and isn't just a repeat from last time.
'Some people go into autopilot when they do their tax returns,' Wong said.
'They cut and paste from their last return and fail to consider any changes to their personal circumstances.
'Turn off the autopilot and take time to seriously consider what's different about your expenses this year and think about what you could claim."
You might have travelled more for work this financial year compared to last, or your work-from-home expenses might have changed.
Wong explained that these types of expenses can fluctuate from year to year, and you could be missing out on some much-needed money if you didn't accurately reflect that change in your tax return.
"Maybe you started a new job where you had to buy tools, subscriptions, or pay for training and security clearances, for example," Wong added.
The ATO has a good guide for what you could list as expenses depending on your industry and job.
CPA Australia said you should "strongly avoid" asking AI platforms like ChatGPT for tax advice as it could steer you in the wrong direction.
'Getting your tax return right is your responsibility,' Wong said
'Failure to properly declare your income increases your chances of being audited by the ATO.
"Failing to claim everything you're entitled to means less cash back than you could otherwise get.'