Are you aware of the time limits when it comes to amending your tax return? It’s important to understand these crucial timelines to manage your tax affairs effectively. Let’s break it down. The clock starts ticking from the day after you receive your notice of assessment. For instance, if your notice of assessment is dated November 1st 2023, your two-year amendment window begins on November 2nd 2023. That means you have until November 1st 2025 to request an amendment to your tax return. But remember amendments are part of the self-assessment system. The tax authorities accept the information in your amendment at face value.
However, there are legal limits when it comes to amending your tax assessment. Beyond these limits, you may need to lodge an objection instead. You’ll need to lodge an objection if you want to:
- dispute the law
- dispute the facts used to determine your tax affairs or
- if you want to lodge an amendment outside of the time limits.
While the time limit for lodging amendments and objections is generally the same, in some circumstances, you can request an extension of time to lodge an objection. You can submit multiple amendment requests within a period of review. The time limit is there to provide you with certainty about your tax affairs as it prevents amendments to your tax assessment outside of the time limit.
Amend a Return for Repayment of Income
You are allowed to amend your tax return when you repay income, whether you were liable or entitled to the income or not.
Exception to Repaying Income
If you are required to repay an income that was part of your assessable income in an earlier income year, you are allowed to apply for an amendment of that year’s income. The only exception is:
- where you get the income as a benefit, and
- you are required to repay that income because you receive either:
- total compensation payment
- total payment for the injury you suffer in your occupation.
Entitled to the Income
If you are correctly paid an amount that is due to you, then you are entitled to income. You may need to amend your tax return in case you need to repay that amount later. For instance, you get paid on the condition that you’ll work with an employer for a specified time period but you don’t meet the condition and you’ve to repay the employer. You must meet all of the conditions written below before you apply for an amendment to your tax return:
- you have repaid the amount
- you are not allowed to claim any deduction for the repayment in any year
- the payment is not received from a lump sum settlement.
Not Entitled to the Income
If you get paid due to a mistake, you are not entitled to income. Examples of mistakes include where:
- the legislative authority mistakenly overpays your taxable pension, payment or allowance
- your employer overpays salary mistakenly.
In this case, the amount doesn’t need to be repaid prior to amending your tax return. Your employer must give you either an income statement, amendment payment summary, or a letter correcting the one previously issued. You need to submit a copy of this with any amendment request.
If your employer reports to the ATO through Single Touch Payroll, they don’t need to give you a payment summary. Instead, your payment summary will be replaced by an income statement.
It’s important to understand these rules to ensure your financial stability. If you have questions or need more information, don’t hesitate to contact Reliable Melbourne Accountants. Stay informed, stay compliant and keep your financial matters in order as your financial future depends on it. For any inquiries or assistance, reach out to us as we can help you navigate the complexities of tax amendments and objections.
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