ATO warning ahead of $2,500 cash boost coming in weeks: ‘Can delay’ – Yahoo Finance Australia

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The end of financial year is fast approaching and millions of Aussies will soon be able to lodge their tax returns for the 2025-26 financial year. While many Aussies will be keen to get their tax refund as soon as possible, the Australian Taxation Office (ATO) is warning people to go slow or risk delays.
The ATO revealed it corrected more than 140,000 individual tax returns due to discrepancies in employment income, interest, dividends, Centrelink payments, Medicare levy exemptions and private health insurance last financial year.
Its data matching program adjusted more than 595,000 individual tax returns due to missing income, overstated deductions and tax credits, and other discrepancies.
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ATO assistant commissioner Anita Challen said taxpayers could save time and effort by waiting until all their pre-filled information is available. That includes information from your employer, bank, government agencies and health funds that gets reported to the ATO.
"While the ATO welcomes taxpayers' enthusiasm at the start of tax time, the numbers don't lie – lodging too early creates more work for taxpayers," Challen said.
"Many taxpayers assume getting in first means getting a faster refund, but that is not always the case. Early lodgement increases the likelihood of missing information and mistakes being made, which can delay processing and require amendments.
"We know doing your tax return isn't at the top of most people's to-do lists, but we see many still rush to get it done. It's worth taking the time to get it right the first time."
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The ATO recommends waiting until late July to lodge, as by this time, most pre-fill information will be available in your return.
"Taxpayers simply need to check the information, add in any missing information, including cash income, and eligible deductions," Challen said.
Last year,  the ATO revealed it issued more than 2.6 million individual refunds as of July 31, with an average refund of $2,548.
The ATO will be cracking down on areas where taxpayers are likely to make errors this year, including work-related deductions and expenses, and omitted income.
Work-related expenses need to be related to earning your income, you need to have spent the money yourself and not been reimbursed, and you need to have records to support your claim, such as receipts, invoices or logbooks.
If you are claiming work from home expenses, you can choose two methods: either the actual cost or the fixed rate method, which lets you claim 70 cents for every hour worked at home.
You need to declare all sources of income in your tax return, including any side hustles, cash jobs, interest and rental income.
With more Aussies using AI tools to prepare their tax returns, taxpayers are also being warned about using AI-generated deduction lists that include claims they are not actually entitled to make.
RMIT professor of finance Angel Zhong said even if AI helps prepare your tax return, you still need proper receipts, records and evidence to support their claims.
"Additionally, digital platforms are increasingly sharing transaction data with the Australian Tax Office through data-matching programs, and identifying small online income streams that many Australians think fly under the radar. Even if earnings seem minor or irregular, they may still be taxable," she said.
"The ATO's systems are becoming smarter and more automated. Taxpayers should focus on substantiation and good record-keeping rather than chasing questionable deductions."
The ATO has 40 industry and occupation-specific guides that can help you figure out what you can claim and the records you need to back it up.
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