Itching to file your tax return? Check out these four things first

June 28, 2026 — 5:01am You have reached your maximum number of saved items. Remove items from your saved list to add more. For unabashed finance nerds like myself, the end of one financial year and the start of another is always a bit like Christmas.

Suddenly, everyone is celebrating something we’re extremely into all-year round. In Australia, though, our tax system has long been pretty confusing and unnecessarily complex for the average person to navigate. And though there have been many improvements to make it simpler and easier, there are always new things to be aware of.

During a period of sustained cost-of-living pressures especially, it’s entirely understandable that people are itching to see if they’ll get a nice return or a naughty bill. But before you sit down and hit the “lodge return” button, here are some things to get across. For a while now, the ATO has been using increasingly sophisticated analytics, AI systems and data matching to compare the information it has on file against the information you’ve included in your return.

Unlike the olden days, when human auditors had to pore over individual files looking for inconsistencies with a red pen, the new process is infinitely faster and more sophisticated. That might sound scary, but as long as you can explain your claims, you’ll be OK. Such cross-referencing covers an awful lot a lot of ground – from your health insurance, PAYG summaries, superannuation contributions and banking information to property transactions, share and investing accounts such as cryptocurrency, and platforms tied to the gig economy, including Airbnb, Uber and Airtasker.

As I said, it’s pretty sophisticated. Of the lodgments made in 2024-25, data matching was able to pick up discrepancies when it came to over-claiming deductions or missing income so successfully that 595,000 returns needed to be adjusted. So, if you are thinking about doing anything sneaky or hoping to outsmart the ATO this year, I’d seriously suggest thinking twice.

Just as it is critical to ensure you claim everything you’re eligible to claim, and do so correctly, it’s equally important to ensure you’re not claiming things you shouldn’t claim. This includes unusual deductions (such as a courier driver who tried to claim a pair of Speedos, which the auditors rejected) or excessively large items, as in the case of someone who tried to write off $17,000 in baby clothing (they didn’t succeed). Another thing to get across is claiming items that are no longer on offer.

For example, at the height of the COVID-19 pandemic, when many of us were working from home a lot, temporary claim measures were introduced. Back then, most of us were working from home five days a week, but now most employers report workers being in the office at least three days a week. So, if you attempt to claim 100 per cent of your home internet, mobile phone or heating and cooling bills, know there’s a good chance you’ll be hearing from an auditor who has a few questions.

According to the ATO, the most common claims last year were car expenses ($11.9 billion claimed by 3.9 million individuals), travel expenses ($2.

7 billion claimed by 1.7 million people), clothing ($2.4 billion claimed by 7 million people) and self-education ($1.

9 billion claimed by 1.1 million). As great as the temptation is to find out on July 1 or shortly after how much money you’ll get back or the size of the bill you’ll need to foot, there are reasons against lodging your return in those first few days of the new financial year.

For starters, the ATO specifically asks you not to do that because rushed tax returns tend to be among the hundreds of thousands that end up needing adjustments. Second, by giving it a couple of weeks, you’re allowing your employer, health insurer, superannuation company and other relevant bodies enough time to file their documents to the ATO, and the ATO enough time to pre-fill most of the information it needs to make things quicker for you. Having said that, you shouldn’t wait too long either because putting it off could cost you dearly.

This year, the deadline for lodging a statement is October 31. After that, you’ll begin to face fines that start at $330 and increase as time goes on, all the way up to $1650. You could also be subject to what’s called General Interest Charges (GIC), levied at 11.

43 per cent and compounding daily. If you think a number of significant tax changes are heading our way and you need to wrap your head around them, you’re right. But the changes announced by the federal government as part of this year’s budget don’t actually apply this financial year.

Among those changes, which passed the Senate earlier this week, the Working Australians Tax Offset (WATO) – which is a $250 tax offset – is scheduled to kick in from July 1, 2027. This will work by directly reducing the amount of tax you owe at the end of the financial year. So, say you were due to pay $1000 in tax, that will fall to $750 once the WATO is applied.

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