Tax refunds vary per tax payer; some get a large sum, others small, while some people end up owing. This is all dependent upon your own personal circumstances. Comparing your tax refund to those around you can be frustrating and can leave you questioning why yours is lower than the person next to you. We have a few possible reasons as to why your tax refund could be lower than your mates.
One of the common reasons that your tax refund differs from your friend’s is that you two are in different circumstances. For instance, your friend could earn a higher income, sometimes resulting in a higher tax refund. It is also possible that he/she has more deductions than you, therefore allowing for a larger refund.
Along with different circumstances, it is possible that you have a Centerlink or child support debt that requires payment. When you have an outstanding balance on one or both of these types of bills, it will automatically be deducted from your tax refund. If this applies to you, it could be possible that your friend does not have these debts, which allows for a larger refund for them.
Another possibility as to why your friend received a larger tax refund is that he/she has rental properties. In the case that they do have rental properties, it is possible that the properties are negatively geared, in which case causes a reduction in his taxes, resulting in a refund.
While we hope this last scenario is not the case, it is possible that your mate falsely claimed deductions on his return. If he/she entered information that is not true, it could be the reason he/she is receiving a larger tax refund. This situation does happen and in some cases it is a result of innocently following the wrong advice. Regardless of if it was intentional or if it was a conscious decision to falsely claim information his/her tax returns, if discovered by the ATO, fines could be the result. For this reason, it is always good to double-check what you are claiming either with a tax agent or with the ATO website.
Every year your tax refund can differ based on your circumstances. It is important that you are getting the information on your income tax returns correct and detailed. By doing this, you are giving yourself the opportunity to receive the full refund you deserve, without being liable for penalties if audited.