I am sure you are getting excited at being able to very soon, lodge your 2021 income tax return. While the temptation to lodge tax returns early this year may be great, taxpayers have been urged to hold out until the ATO finalises income statements and pre–fill information to avoid a surprise tax bill down the road.
“We understand that some individuals have been adversely impacted by COVID-19 through loss of employment or reduced earnings and they will want to get their hands on their refund as quickly as possible,” said the IPA’s chief executive, Andrew Conway.
“Our strong message is to wait for the information to become available before you lodge; otherwise, you may end up with an unexpected tax bill and angst down the track.”
With the ATO now receiving critical data on cryptocurrency transactions, e-commerce sales from eBay and Amazon, and gig economy activities such as Uber and Airbnb, early lodgers are being warned that the risk of potential audits and amendments are now higher than ever.
“So, it is no longer just interest, dividends and trust distributions that the ATO will be looking for,” Mr Conway said.
“Gains on property and cryptocurrency transactions, side hustles on e-commerce platforms, contractor services performed in sectors which have been previously found to be non-compliant, derivative trading etc are among the information that the ATO will compare with what has been lodged.
“If someone has any income from these varied sources, then it is even more important not to lodge early until this data has had time to hit the pre-fill records.
Employers need to submit a final STP declaration by 14 July so that this information can be used by employees in their tax returns. Once the STP has been finalised, the ATO will notify employees that their income statement is “tax ready” in their myGov account and this information can be used in their tax returns.
Should you have any questions specific to your situation, contact us at email@example.com or contact Accolade Accounting on (08) 6263 4466 or (03) 9524 3145 to get further advice.