Think you’ve made a mistake on your tax return or forgotten to include something?
Don’t worry; it’s easy to fix up an already lodged tax return by lodging what’s called an amended tax return.
How do I lodge an amended tax return?
Etax Accountants or any other tax agent is able to lodge an amended tax return up to two years from the original date of lodgement. If you’ve made an error on a tax return you’ve already lodged, let us know as soon as possible and we can help you get started.
Call us on 1300 693 829 or email the team on [email protected]. Alternatively, send your accountant a secure message while logged into your Etax Account.
Why should I lodge an amended tax return?
Let’s take a look at some of the reasons why you might need to amend your tax return:
- You’ve forgotten to include some income.
- The income you have included is incorrect.
- You’ve forgotten to include deductions.
- You’ve claimed more deductions than you’re eligible to claim based on your circumstances.
The above four scenarios are remarkably common and depending on the exact change you need to make to your return, an amended tax return might even see you increase your refund.
Regardless though, if you’ve lodged an incorrect tax return, either intentional or not you should fix it up ASAP.
The ATO isn’t silly 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.
And, while more often than not 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. We’ve seen clients receive fines for returns that were incorrectly lodged two or three years ago.
Isn’t it better to clear up and fix and incorrect tax return now, rather than run the risk of an ATO fine?
Case Study – Claiming deductions you’re not entitled too.
This is a pretty big no-no for the ATO, and they’re able to find you with ease:
Andrew works for a big construction company. He claimed deductions for a range of work-related expenses. He claimed for mobile phone, meal costs, travel, accommodation and training courses.
Andrew got a nice, hefty tax refund – $3800!
But, the thing is, his employer paid for all of those expenses. Andrew didn’t pay directly for most of them, and he was reimbursed for the ones he did pay on his credit card, so he’s not eligible to claim any of those things.
The ATO knew that Andrew’s employer pays for almost every expense. Because the employer claims those expenses in their taxes! Andrew received an amended Notice of Assessment for his 2021 return. He owes the $3000 of his refund back to the ATO – and they want it now. He’s being charged interest for every day that passes.
On top of that the ATO has issued Andrew with a $560 penalty for failing to take reasonable care on his tax return.
Then Andrew gets another letter. It’s an Amended Notice of Assessment for his 2020 return, from the year before. What’s going on? Well, the ATO knows that Andrew was dishonest about his 2021 return, so now they are checking his previous tax returns. This letter demands an additional $2900 from his incorrect 2020 return, plus includes another $560 penalty.
All up Andrew now has to pay the ATO $7,000 plus interest. That hurts.
The repercussions of incorrectly claiming tax deductions can be harsh. By lodging a tax return amendment, you can often resolve the issue prior to the ATO issuing a fine.
We’re available to talk to you if you’re worried about an issue with your tax return.