Mr Taxman
Change the way you feel about taxes.
Get informed and discover what the taxman doesn't want you to know.
Sharing it with Australia, Mr Taxman is a regular Woman’s Day columist and TV finance commentator
  • click to visit Mr Taxman on Twitter
  • click to visit Mr Taxman on FaceBook
  • rss

Red light for taxpayers rushing to receive a quick refund, who could cop a shock for being too quick

Jul 09, 2017

THERE has been a big jump in the number of Australians rushing to grab a fast tax refund, but there’s a potential sting.

Tax specialists warn that being quick off the mark can result in costly errors because Australian Taxation Office technology is likely to spot undeclared income.

Annual payment summaries from employers are not due until July 14, while the ATO’s pre-filled data such as bank interest and share dividends may not appear on electronic returns until mid-August.

RELATED: How to claim money working from home

ATO figures obtained by News Corp Australia show that about 300,000 individuals and tax agents lodged electronic returns in the first week of July, up 20 per cent on last year.

“More than 20 per cent of lodgements have been via a mobile device,” ATO assistant commissioner Kath Anderson said.

Ms Anderson said the ATO contacted about 350,000 people each year about errors in their tax returns.

ATO assistant commissioner Kath Anderson said many tax lodgements last week were on mobile devices.

“One of the most commons mistakes we see is people forgetting to declare all their income,” she said.

“We know that taxpayers like to get in early and lodge in the first month of tax time, but our analysis shows that if you lodge in July you’re far more likely to make a mistake by leaving out some of your income.”

Ms Anderson said people should remember to include all income including wages, interest and dividends, income from the sharing economy, government payments, income from cash jobs and capital gains.

RELATED: Tax deductions without receipts

Almost four out of five of the nation’s 13 million-plus individual taxpayers receive a tax refund, averaging more than $2500.

Deakin University department of accounting associate professor Adrian Raftery said understating income was the biggest issue at tax time.

Deakin University’s Adrian Raftery said there was nothing worse than owing money you’ve already spent.

“My advice would be to wait unless you are absolutely certain that you have correctly recorded your income in your lodged tax return,” he said.

Dr Raftery said people who had changed jobs should make sure they had all their PAYG payment summaries “otherwise you will get a nasty surprise once the ATO catches up with you”.

“The ATO’s data-matching systems are getting better and better as they add more agencies to their long list of sources. They are aware of share and property sales for capital gains tax purposes.”

Dr Raftery said people who didn’t declare all income and were caught would receive a please explain letter from the ATO “plus and amended assessment down the track, usually with penalties attached”.

“Hopefully you haven’t spent all of the original refund when you have to pay back the shortfall to the taxman. There’s nothing worse than having spent money that isn’t yours and there is knocking at the door asking for it back.”

@keanemoney

Original article published here in The Herald Sun on 9 July 2017.

Comments

Post a New Comment

Media Availability

Are you interested in booking Mr Taxman for a speaking engagement or requesting his viewpoints for an article?

comments-rhsLatest Comments

  • "I finish full time job in April and started to learn foreign currency trading. Attended a $5000 course and practiced in a $1000 account. Learned $200 by end of Month. Can I deduct the $5000..."

    By: jasmin at Oct 23, 2017 6:13AM

    Post: Marriage

  • "My names is Cathy i want to testify about the great spell caster called Priest Ade my husband and i have been married for 5 years now we don't have a child and the doctor told us i can't give birth..."

    By: Cathy at Oct 22, 2017 7:38PM

    Post: Marriage

  • "my husband of 6years left me just because i could not give him A child, i did all i could to make sure i give him a child, i even went to an extent of forcing him to have sex with me every night but..."

    By: carol at Oct 22, 2017 6:07AM

    Post: Marriage

  • "If i used a line of credit to purchase the shares, what documentation do I need to prove the loan was used for investments? Does it matter that I also have a home loan for a owner-occupied home? "

    By: Brad at Oct 18, 2017 9:02AM

    Post: Borrowing to buy shares

  • "HI Mr Taxman, I am part time UBER driver. Since my full time job salary is high and my wife is unemployed, can I get my wife buy a car and rent to me? Each week I pay part of my UBER income as car..."

    By: Peter at Oct 17, 2017 3:42AM

    Post: Marriage