Warning issued for early bird tax returns
tax-and-legal-advice
1 minute read

Warning issued for early bird tax returns

Warning issued for early bird tax returns

by Sasha Karen | June 07, 2019 | 1 minute read

Property investors eager to cash in on their tax return this financial year might want to take their time as filing too early could prove problematic, according to an Australian accounting body.

ATO
June 07, 2019

With the end of the financial year fast approaching, some are preparing to lodge their 2019 tax return early. However, according to a statement from the Institute of Public Accountants (IPA), there are a number of issues that should be of concern to property investors.

The first, specifically in relation to those low and middle-income earners, is the government’s plan to pass the increase in the low and middle-income offset, which is set to apply for the 2019 income year.

“Eligible taxpayers can receive up to an extra $530 for singles or $1,080 for a couple,” the IPA statement read.

“The ATO has stated that it cannot process the higher amount until the law is passed but will be able to automatically amend a return if the law changes after a taxpayer receives their assessment.”

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For investors who are still employed, single touch payroll coming into effect means that while employees do not need to wait for a payment summary, the information provided on myGov may not be accurate until the employer puts the data through a finalisation process.

Another potential delay set to affect investors is third party data-like dividends, interest and share disposals. Uploaded to the ATO’s systems periodically over the month, this data can take some time to appear, according to the IPA.

“The ATO has the right to auto-amend a return, which it has been doing for discrepancies, but interest and penalties can be applied by the ATO,” its statement noted.

“Our advice is that unless you have certainty and completeness around the information used to finalise your return, we are encouraging all taxpayers to rethink lodging returns early this year especially in light of the above changes.”

The ATO is also increasing its scrutiny on property investors. As explained by Tony Greco, the IPA general manager of technical policy, the ATO has conducted a random sampling of taxpayers who own rental properties due to finding errors in nine out of 10 rental deductions.

“Investors can inspect more compliance to weed out inappropriate behaviour,” Mr Greco said.

“The ATO will be using data analytics to help identify problem taxpayers so rental property owners have been warned to ‘swim between the flag’ to avoid interest and penalties.”

Further, a large number of errors have also been found in tax agent and non-tax agent returns relating to work-related deductions.

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