Early Tax Return: Risks & Why to Avoid It

Early Tax Return: Why it’s risky and the complications it entails.

While it may seem like a quick fix before leaving, here’s why it’s usually not advisable.

At GoTax, we receive many inquiries from clients who are leaving Australia and are considering filing an early tax return, that is, submitting their tax declaration before the end of the fiscal year.

What does Early Tax Return involve?

This process involves sending your tax return by mail to the Australian Taxation Office (ATO) before the financial year ends on June 30. While it seems straightforward, this method can become a real headache for several reasons:

A slow and costly process
The refund is never as expected
Complications in resolving errors from abroad
Risks of failing to meet legal requirements

A slow and costly process

The early tax return is not resolved quickly. This method can take several months to complete, meaning that if you’re expecting a refund, you’ll need to be very patient. Additionally, to complete the process, you may need to make international calls or hire specialized assistance to manage any issues that may arise. These extra costs can make the process more expensive than you anticipated.

The refund is never as expected

One of the main problems we’ve identified is that refunds processed through an early tax return are often less than expected. This happens mainly for two reasons:

– Errors in the declaration: Without proper assistance, most of you ends up paying higher taxes than necessary.
– ATO restrictions: If you don’t present invoices supporting your deductible expenses, the ATO will not accept any expenses. This includes even the reasonable minimum amounts that are normally allowed in a standard declaration.

The result: a reduced refund and, in some cases, unexpected debts!

Complications in resolving errors from abroad

If your declaration has errors or you need to appeal a decision, resolving it from outside Australia is extremely complicated. Communicating with the ATO from abroad is not only cumbersome but can also involve long waits on international calls, additional costs, and many hours of frustration.

Risks of failing to meet legal requirements

The early tax return can give a false sense of “job done,” but the ATO may require more information or make adjustments to your declaration even after you’ve left Australia. Not being in the country to respond to these requests can put you in a situation of legal non-compliance, with the risk of fines or future problems if you plan to return to Australia at some point.

Advice: What is the best alternative?: At GoTax, we always recommend waiting until the fiscal year ends to file your tax return online. Even if you’re no longer in Australia, you can count on our assistance to manage the tax return easily, ensuring that you take advantage of all possible deductions and comply with current regulations. With our help, you’ll avoid errors, maximize your refund, and won’t have to worry about complicated procedures from abroad.

The early tax return may seem like an attractive option, but in reality, it often brings more inconveniences than benefits. At GoTax, we’re here to guide you and ensure that your tax return is a hassle-free process, even if you’ve already left Australia. If you’re leaving Australia, make sure you have everything in order to save yourself more than one problem; visit our article on the Complete guide to managing your taxes and Superannuation before leaving Australia.

If you’re considering this option or have any questions, don’t hesitate to contact us.