Nobody is perfect. We all can make mistakes on Australian Taxation Office (ATO) forms, but it can end up hurting your business if you leave off a tax credit or deduction. You might end up with a return much less than you were expecting or owing more money than you thought. However, not all is lost. You can request an amendment on your recent tax returns so even if you make a mistake, you can easily fix the problem.
What are Some Common Mistakes on Tax Returns?
People often make a number of mistakes when filling out a tax return. Common ones include not declaring:
- Income from interests
- Tax offsets
- Deductions such as fuel credits
- Extra income sources, such as investments and capital gains.
Be on the lookout for these items and you might avoid the need for an amendment in the long run.
How Long Do You Have?
Let’s say you notice a mistake or you forget to claim fuel credits. For individuals and small businesses, the time limit is generally two years from the day after your notice of assessment is issued to rectify or amend your tax return. For example, if you receive a notice for assessment on 28 October, 2015, then you have until 27 October, 2017 to lodge a request for an amendment.
You can submit more than one amendment request within an amendment period, however if you want to change a tax return after the time limit has passed, you’ll need to lodge an objection with the ATO. In some cases, you can request an extension of time to lodge to make an amendment.
How Do I Request an Amendment?
Small business operators and sole traders have a few options to lodge a request for an amendment:
- Using Standard Business Reporting-enabled software
- Using the ATO’s Business Portal
- Doing it online at myGov (for sole traders)
- Getting a registered tax agent to help you
- Sending a letter to the ATO
How Long Does It Take?
Once you request an amendment, the time to process your request varies. Amendments requested through mail or fax takes about 50 business days, while requests lodged online or through a tax agent takes about 20 days.
If you’re owed money, the amended notice of assessment will let you know the amount, plus interest, and if you owe money, you’ll be told when it’s due. If you do owe, it’ll be treated as a voluntary disclosure of unpaid tax – so you’ll get concessional treatment for any penalties and interest charges that apply.
Amending a tax return might save you some money, so if you think you’ve made a mistake talk to your tax agent, or update your accounting software to keep you compliant and ahead of the tax man.