When it comes to tax season most people are quite anxious to receive their tax refund. For that reason, the top question that we are asked as a company tends to be ‘When should I expect my refund to come through’? It is unfortunate that we cannot give exact dates for this, however, we can estimate times based on previous years as well as ATO publications.
A typical tax refund from the Australian Taxation Office, also known as the ATO, takes on average two-weeks to be paid. This being said, it is important to emphasise that this is an average, meaning some tax refunds can take longer while others may not take the full two-weeks. We have sat down as a team and worked out some of the main causes for a delayed tax refunds. The following are some of the most common issues that we come across that delay the process.
One of the most common issues that we come across with our clients that result in delayed returns is forgotten income. Forgotten income can be tricky and most times is found in places that you would overlook. Here are some questions to ask when considering your income;
- Did you switch jobs this year-resulting in multiple payment summaries?
- Did you earn interest from any of your bank accounts?
Income and Dividends are commonly overlooked. In order to capitalise on your early lodgement of your taxes, it is important to consider ALL areas of income. By forgetting to include these, it is quite possible that your tax refund will be delayed.
Similar to the forgotten income, it is important to verify if you have a trust, investments or capital gains that these are included on your tax returns. Often, clients forget about this portion of their finances. When income like this is missed on your tax returns it can result in delays as well. A good rule of thumb to remember is; if you received money, most times, it is a source of income and you should include it in your taxes! Please note that there are a few exceptions, examples being loans and inheritance; verifying sources of income is important prior to filing.
Another potential source of delay is by filing an incomplete paper lodgement form. Although in this day and age, paper tax forms are rare, if paper is how you choose, please note the following can deter a smooth filing of your tax returns. By innocently missing to fill out your birthday, Tax File Number (TFN) or even your signature, can result in a timely delay. So please exercise caution if doing a paper lodgement. By properly completing the form, this allows the ATO to complete their job more efficiently, which consequently, allows your refund to arrive sooner!
If you are choosing to electronically file your tax returns, these problems should not occur! By using an e-tax or an e-lodge service, you often will receive an alert when you have missed a portion of the required information. By using a computer based program, this allows for a second glance automatically, therefore resulting a lower chance of missing critical information!
In this busy Tax Season, our goal is to get tax refunds back to people as quickly as possible. These are some of the steps you can take to ensure the best possible outcome on receiving your tax refund in a timely manner.