Should you lodge your tax return straight away?
You can lodge your tax return from 1 July 2020, but there are several benefits to waiting a little longer before you submit your return.
1 July 2020 marks the start of the new financial year, meaning you're officially able to submit your 2019-20 tax return with the ATO from this date. However just because you can lodge your return, doesn't mean you should. Waiting a few weeks before lodging can potentially save you time and also money.
Here are a few reasons why you should consider waiting to submit your tax return.
Your income statement might not be ready
Yes, you're officially allowed to submit your tax return from 1 July, but your employer has a different deadline. Your employer has until 31 July to submit your completed, up-to-date income statement (often referred to as a group certificate) for the financial year with the ATO.
Your income statement is what the ATO uses to correctly calculate how much tax you are required to pay for the financial year. It uses this statement to help determine if you've paid too much tax and, if you have, you'll get this money back in your tax refund. This means if you submit your tax return on 1 July before your income statement is finalised, there's a possibility that you might need to submit it again when your updated income statement is ready.
If you've lost your job, had your income reduced or been put on JobKeeper over the last couple of months, there's also a good possibility that you've paid a bit more tax throughout the year than you needed to. This will be reflected in your final income statement for the year. Waiting until your income statement is ready will ensure you get all the additional tax back that you've overpaid throughout the year.
The ATO site has already crashed
The ATO site crashed a few hours into the new financial year on 1 July as thousands of people flooded to the site to submit their tax return. It's likely the site will be down a fair bit over the first few days of July because of the huge spike in traffic.
This alone is another reason to wait a few weeks before lodging your return: no one wants to deal with a slow site that keeps crashing and reloading when you're trying to complete a several-page form.
Will you get your tax return faster if you lodge on 1 July?
A lot of people rush to submit their tax return in the first few days of the financial year in the hope that they'll get their tax refund sooner. This isn't necessarily the case.
As mentioned above, the ATO needs to see your up-to-date income statement from your employer along with tax statements from your health insurer, broker and bank in order to correctly calculate your tax return. These statements might take a few weeks to come through, meaning your tax return could be delayed.
You need time to calculate all your deductions
Unless you're super organised and you've already calculated your deductions for the 2019-20 financial year, you'll need a bit of time to do this. It's worth taking the time to research what you're eligible to claim and how to claim it properly, as it means more money back in your tax return.
There's a bunch of new deductions relating to coronavirus that you could be eligible to claim this year. For example, if you've been working from home you could be eligible to claim hundreds of dollars worth of home-office expenses.
Before you submit your return, check our full guide on how to lodge your tax return this year and the special coronavirus-related deductions you can claim.