Jen Rothwell, a 28-year-old from Melbourne, is warning others to double-check their tax returns before lodging after she received a staggering $1,130 bill from the Australian Taxation Office (ATO).
Rothwell recently discovered she was audited for her 2023-24 tax return and was flagged for not including $2,000 in interest earned from a term deposit in her taxable income.
Banks report interest paid to the ATO, which then gets pre-filled into your tax return. However, this data may not be finalized until the end of July.
The Consequences of Lodging Too Early
If you lodge too early, you could miss out on crucial information unless you manually input it yourself.
This is exactly what happened to Rothwell, who lodged her tax return at the start of July last year.
As a result, she received a $12,000 refund instead of the $115 she was entitled to. Now, she’s facing a $1,130 tax bill after her income was readjusted.
“It came as a shock to me as I have never had that much money owing to the ATO before,” Rothwell said. “Currently, as we are saving for a wedding, having any large extra expenses that have not been planned is not ideal.”
A Lesson Learned
Rothwell has set up a payment plan with the ATO to pay off her tax debt, which she says was “easy enough” to do. Her debt will be repaid in about 64 weeks.
She’s not the only one who’s had a similar experience. Several others have shared their stories online, including one person who was charged an extra $700 by the ATO despite already having to pay $2,500.
Rothwell’s advice to others is to wait a few weeks before lodging their tax returns to ensure all information is included and accurate.