Tax refunds likely for 200,000 Australians, says ATO

Tax refunds likely for 200,000 Australians, says ATO

As tax season comes to a close, the ATO has discovered 200,000 people who should be expecting refunds, and yet haven’t filed yet. Are you one of them? 

With the October 31 deadline looming for Australians needing to file tax for the previous financial year, the Australian Taxation Office (ATO) is asking whether you could be one of the many who would be receiving a refund this year.

While lodging tax is a requirement for most people, some try to avoid taxes for fear of owing money. Unfortunately, some of these people may not in fact owe anything this year, and may instead have some money coming to them.

Without taxes being filed, however, the government can’t return any money owed, meaning there are plenty of people who could get something back from the government, but haven’t done so yet.

The money at stake isn’t small, either, with millions of dollars collectively in refunds being owed.

“Unfortunately, the tax office can’t return your money until you lodge a tax return,” said ATO Assistant Commissioner Kath Anderson.

“There are a few reasons why Australians might not lodge even if they are due a refund,” she said. “Some might not lodge because they don’t realise they need to – maybe they are on a low income or haven’t worked recently. Others might be worried about lodging because they haven’t lodged for several years, which often causes them stress and anxiety.”

“The key thing to remember is that the ATO is here to help; we want all taxpayers to get it right, and we will assist them to do so.”

With one month to go, the ATO is reporting that around seven million taxpayers have lodged their tax, with almost 4.3 million using an agent, while just over 2.7 million did their own taxes using the government’s myTax program.

Those who have been owed a refund receive it fairly quickly, with 98 per cent of tax refunds this year issued within 12 business days, increasing the incentive to get taxes out of the way.

“We know some people put off lodging because they think they’ll owe money, but for self-preparers the payment is due on 21 November whether or not a return is lodged,” said Ms Anderson.

“The ATO will help people who may have difficulties paying a tax debt, and work with you to tailor a payment plan to your circumstances. Some taxpayers may even be able to set up a payment plan online depending on their circumstances,” she said.  

If you’re putting off doing your taxes, it might be time to get that done, if only so you can ensure this year’s financial records are sorted. If anything, that refund you possibly have coming your way could be used as a way of settling any credit card debt, or anything else you choose.

Did you find this helpful? Why not share this news?

Advertisement

RateCity

Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the ratecity.com.au Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy

Advertisement

Learn more about savings accounts

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.