Feeling Disappointed with Your Recent ATO Refund? You’re Not Alone.

Average ATO FY22/23 refund drops by $430 from the previous year.

Many early tax return lodgers were disappointed this year as the average refund dropped over $430 compared to last year. According to the ATO Statistics for the first month of FY23-24, the total amount of tax returns issued so far has fallen by $1.7 billion. That is, from $6.7 billion in the previous year to $5 billion this year.


The decrease in refunds can be attributed to changes in the work-from-home fixed rate deductions method and the end of the low to middle-income tax offset (LMITO). Due to these changes, taxpayers have been slower to file their returns this year compared to the previous year.


One of the factors behind the smaller refund is the changes in the work-from-home claims process. Previously, taxpayers could use a simple cents-per-hour shortcut method or a fixed rate method worth 52 cents per hour for work-from-home deductions. However, since March, the revised fixed rate method is now worth 67 cents per hour, and deductions require substantiation by daily timesheets.


Taxpayers who used a tax agent to file their returns received an average refund of $2,669, significantly higher than those who self-prepared their returns, with an average refund of $2,228.


No data is presented on the number of returns needing adjustment before assessment, which saw 140,000 amendments last year due to taxpayers lodging before their prefill information was available. ATO has issued a warning for taxpayers to wait for all necessary information before lodging.

Should you require any additional assistance please don’t hesitate to contact us.

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