In your experience of tax returns (you should have some if you’re a working Aussie) you might have come across the phrase ‘balancing account’ and are wondering what this means exactly.
Fair enough, but it’s nothing bad nor too complicated. Essentially, ‘balancing account’ is a processing status used by the ATO once your tax return is lodged and in their hands, before the results, so to speak, are returned to you.
When you lodge your tax return the ATO is looking at your income and your expenses, alongside the tax you’ve paid throughout the year, and working out if you owe any tax or will have some tax money returned to you.
Basically, they are doing things like adding up all your annual income, subtracting your claimable business expenses, cross checking numbers with other government departments, checking your spouse’s income details, checking your health insurance details… all sorts. It’s quite the process!
Why would a tax return end up in ‘balancing account’ status?
It’s possible for your return to end up in the ‘balancing account’ status because even though the ATO has your financial info, they still need to calculate your refund or bill (I know, we hope it’s the former one too).
This status takes a smidge longer than your standard processing timeframe, because the ATO are being good samaritans and undertaking their due diligence. They’re looking at all the information you lodged and cross-checking it with any other relevant government bodies, like Centrelink for example. Dotting the i’s and crossing those t’s.
If you end up in this purgatory state, it’s really nothing to worry about (so long as you’ve been good and honest like you were taught). You’ve just gotta exercise that patience muscle.
How long does the ATO take to balance your account?
Generally, the ATO aims to have everything processed and ready to rock within a 2-4 week timeframe. That being said, a more detailed or complex tax return (such as the ones that end up in ‘balancing account’ status) might take longer as there may be more the ATO needs to consider.