Why should you amend your tax return?
There are multiple reasons why you may need to amend your tax return:
- You’ve made a mistake
- You need to include additional information
- You’ve forgotten to include information
- You’ve experienced a change in circumstance after lodging
- You need to change your deductions
- The income you’ve declared is incorrect
- You’ve forgotten to declare income
- You’ve reported gains or losses as income instead of capital gains
- You’ve received fringe benefits and forgotten to declare it as income
- There has been a change of rules and tax law which you’ve been unaware
- Your employer had paid you an allowance and reimbursed you for the expense and you have declared the amount
The Australian Taxation Office (ATO) isn’t dumb when it comes to finding errors on your tax return. They use sophisticated data matching programs to ensure the income you enter and the deductions you claim are accurate and allowable.
Taking the initiative to lodge an amended tax return yourself means you’re unlikely to face an ATO penalty. If you wait for the ATO to spot your mistake you could find yourself with a costly bill and penalty even if your mistake was unintentional.
Don’t think just because the ATO hasn’t caught you for an incorrect return you lodged a year or two ago that you’re in the clear. In many cases taxpayers receive fines for returns that were incorrectly lodged two or three years ago.
How to amend your tax return
1. Through a registered tax agent or tax accountant
If you use a registered tax agent or tax accountant, you can ask them to complete an amendment to your tax return on your behalf.
Your tax agent or tax accountant can complete and submit the income tax amendment electronically for you through the Practitioner Lodgment Service (PLS). It usually takes around 15 days to process, but can take longer.
2. ATO Online Services
The benefit of using the ATO to lodge your amended tax return is that it is free. The downside is that you may end up making a mistake and pay more tax than you need to or alternatively end up paying tax penalties.
Access ATO online services using your myGov account. Submitting an amendment online usually takes around 20 days to process, but can take longer. To lodge your amendment online through myGov:
- sign in to your myGov account
- select ATO from your linked services
- select Manage tax returns from the Quick link.
Time limit to amend a tax return
Individuals normally have 2 years to amend a tax return. This time starts from the day after your notice of assessment is sent to you.
For example, if the date on your individual notice of assessment is 1 November 2023, your amendment period starts on 2 November 2023. That means you have until 1 November 2025 to request an amendment to your tax return.
The tax law sets time limits for amending your tax assessment. Beyond this time, you may need to lodge an objection instead.
You’ll need to lodge a tax objection if you want to:
- dispute the law
- dispute the facts the ATO has used to come to a decision about your tax affairs
- lodge an amendment outside of the time limits.
While the time limit for lodging amendments and objections is the same, you can request an extension of time to lodge an objection in some circumstances.
You can submit more than one amendment request within a period of review.
The time limit gives you certainty about your tax affairs because it means the ATO cannot amend your tax assessment outside the time limit (except in some exceptional situations such as evasion or fraud).
Before Amending Your Tax Return
It is essential to wait until you receive notification that your original tax return or any previous amendments have been processed before proceeding with an amendment. This will help avoid potential processing delays in the future.
There are specific time limits for lodging an amendment to your tax return. If you want to dispute the law or the facts used in determining your tax affairs or if you need to lodge an amendment outside of the time limits, you will need to lodge an objection.
When you submit an amendment, if it results in a reduction of the tax you owe, you will receive a tax refund (unless you have other outstanding tax debts).
On the other hand, if the amendment increases the tax you owe, it will be treated as a voluntary disclosure.
This article is for general information only. It does not make recommendations nor does it provide advice to address your personal circumstances. To make an informed decision, always contact a registered tax professional.