Your tax refund could be smaller than you think
YOUR tax refund this year might be smaller than you think.
As millions of Australians rush to lodge their tax returns, many are jumping the gun and forgetting to declare all their income.
The Australian Taxation Office is scanning returns to match them with electronic records of wages, bank interest, company dividends and other investments, pensions, Uber receipts and other income.
It has already started clawing back incorrect refunds, and last year adjusted about 200,000 tax returns because people had left out income.
Those who don't declare all income must pay back part of their refund and potentially be hit by penalty interest charges.
Some taxpayers get confused because the ATO uses data matching technology to pre-fill part of people's tax returns, but the providers of that data often don't hand it over immediately, so assuming all your income is pre-filled is dangerous.
H & R Block director of tax communications Mark Chapman said most bank interest data was supplied by now, share dividends often didn't arrive until later in August and managed fund income data as late as September.
He said the Commonwealth Bank and ANZ only sent their interest data to the ATO this week, so "anybody who had ANZ or CBA interest would not have seen that information in their pre-fill if they lodged at any time in July".
"A couple of months later they get a 'please explain' from the ATO," Mr Chapman said. Then they must either pay back part of their refund - difficult if it's already been spent - or pay a bigger tax bill.
"It can be a nasty surprise. The ATO doesn't come down hard, but they expect people to pay the tax that's due."
The ATO examines returns as they're being filed, but also rechecks whenever more income data is provided to it.
Assistant commissioner Kath Anderson said income-checking capabilities had been expanded this year to include more from overseas tax agencies and more data from share registries about the buying and selling of shares.
"We receive over 650 million pieces of data each year and it is growing every year as we bring more sources on board," she said.
"We are going to ensure everyone pays their fair share of tax and that it is a level playing field regardless of how you earn your income."
Ms Anderson said the ATO would review more tax returns this year than ever before.
"During July this year we have already adjusted over 50,000 returns to include missing income before we finalised the return," she said.
"We can only do that where we have the information at the time. For others, we will need to follow up later.
"The ATO has more ability than ever to identify people who don't declare all their income."
CHECKLIST TO AVOID TAX TROUBLE
Tell the ATO about all your:
• Bank interest income from all sources
• Salary and wages (including part-time and short-term jobs)
• Share dividends and rental property income
• Investment income from trusts and funds
• Government allowances and pensions
• Capital gains from selling shares, property or other investments
• Uber income, room letting income and other sharing and gig economy income
• Income from selling goods or services online
• Private health insurance details
• All tax deductions you are legally allowed. The ATO won't spot missed deductions, so if unsure speak with a tax agent or look online for ATO guides for employees.