How to Amend a Tax Return: A Quick Guide

You can amend your tax return mistake using several avenues.

[Updated April 28, 2023]

It is a requirement to file tax returns every year. However, not everyone is adept with the technicalities of filing returns properly. Many people make mistakes in their tax returns. Most people do not know what to do once they make mistakes on their returns. They do not know how to go about amending tax returns.

It is important to amend your tax returns if you realize you made a mistake or error in your returns. That will help you avoid penalties from the Australian Tax Office (ATO) for filing an incorrect tax return. ATO allows a window of two years for amending tax returns. Therefore, take advantage of that window to correct all mistakes before you pay for them. If you do not know how to amend a tax return, and you feel overwhelmed by the task, consider consulting an expert to guide you.



What Is a Tax Return Amendment?

A tax return amendment is a correction to a previously filed tax return. It is an opportunity for a taxpayer to correct any mistakes or errors in their tax returns to reflect their correct tax status. The amendment may correct deductions as well as income. The ATO allows tax return amendments within reasonable time limits to allow taxpayers to comply with tax law.

What Happens If I Make a Mistake on My Tax Return?

Tax return mistakes are common. They should not be a reason for you to panic. When you realize you have made a mistake in your tax return, all you need is to request an amendment to your tax assessment. With an amendment, you will be able to avoid the penalty for an incorrect tax return by ATO.

Some common mistakes that may necessitate amending tax returns include:

  • Errors of commission or omission when entering figures
  • Incorrectly deductions or credits claims
  • Failure or forgetting to report some income, deduction, or gain
  • A change in circumstances touching on an item reported in the tax return

It is important to correct the mistakes as soon as you realize the mistakes. Always ensure your amendment takes into account both tax deductions and disclosures of income earned. The amendment helps you streamline your tax affairs and ensures you are in good books with ATO.

ATO Penalties for Incorrect Tax Return

ATO has penalty provisions that they activate in cases where taxpayers fail to meet their tax obligations. The penalties ensure taxpayers comply with their tax obligations. While the penalties consider the circumstances of each case, they can be hefty in some instances. It is thus important for you to ensure you do not fall afoul with ATO. Keep in mind that ATO has the resources and technology to discover any discrepancies on your tax return. That is why you should always ensure you lodge an amendment as soon as you realize mistakes.

As ATO explains, any taxpayer that presents false or misleading statements about their taxes, which lead to a shortfall tax amount, is liable for a penalty. In the eyes of ATO, you are liable for a penalty even when the mistake is unintentional. You can only avoid such penalties if your statement was following their advice or general administrative practices relating to tax law. You can also avoid penalties in cases where the incorrect statement is due to a mistake by a tax agent to whom you presented the correct information.

The behaviour leading to a shortfall amount is key in determining some of the penalties you will pay. For cases where you fail to take reasonable care, the base rate is 25% of the shortfall amount. Recklessness attracts a 50% penalty on the shortfall amount while the penalty for intentional disregard is 75% of the windfall amount.

In cases where the mistakes in your tax returns do not result in a shortfall amount, ATO imposes penalty units based on the behaviour leading to false statements. Each penalty unit carries a financial cost depending on the time the infringement occurred. For infringements that occurred on or after 1 July 2020, each penalty unit costs $222. That may prove costly given the penalty units for mistakes in your returns. Failure to take reasonable care would result in a penalty of 20 penalty units. Recklessness attracts a penalty of 40 penalty units while you will incur 60 penalty units for intentional disregard.

Based on the penalty provisions by ATO, it is costly to provide an incorrect tax return. The penalties, even in cases of unintentional mistakes, are quite high. As demonstrated, the mistakes do not have to result in a reduction in tax liability for you to be penalized. That underscores the importance of ensuring you file a correct tax return. It further stresses the need to amend tax returns once you discover mistakes or errors in your tax returns.

A tax return amendment is a correction to a previously filed tax return.

How to Amend a Tax Return

In case you realize that your tax return has a mistake, you can amend it using several avenues. You can lodge your tax return amendment online through ATO online, complete a paper amendment form, send a letter to ATO, or use the services of a registered tax agent.

One thing to consider before lodging your amendment is the status of your lodged returns. Always ensure that ATO has processed your original tax return before you lodge an amendment. That will help avoid delays in processing the amendment.

The online tax amendment is the best option to use to amend your tax returns. It is easier and quicker. Generally, it takes ATO about 20 days to process your online tax amendment. The online amendment is available to everyone regardless of the mode of filing the original return. To file an amendment online, you need to have a myGOV account linked to the ATO. Access to the online portal grants you access to all tax returns you may need. You can use the provided calculator to get the correct amounts and edit the amounts in question as appropriate.

For those that may not be able to amend their taxes online, ATO also allows you to carry out your amendments in writing. You can use manual forms or a request letter for the amendment. Once you fill out the amendment form, you need to fax and post it. It should also have the necessary attachments. Unlike the online method, the manual option takes up to 50 business days for processing the amendment. Where you opt to write a letter instead of using the amendment form, the letter should include all the relevant information such as your name, address, contact, tax file number, year of tax return, and reasons for the amendment. The option also takes more time than the online amendment.

Using a registered tax agent is recommended but you may not have time to lodge an amendment. It is also viable where you are not sure of how to go about it. It is better to have someone do it for you rather than commit errors that will result in penalties.

What Happens If I Amend My Tax Return?

Once you submit your tax return amendment, ATO reviews the information you provided. During the review, ATO may contact you or your tax agent to clarify and confirm some of the information on your amendment. Once the review is complete, ATO will then make the necessary adjustments.


*General Advice Warning – β€œAny financial advice provided by is general in nature and is not personal financial advice. It does not take into account your objectives, financial situation, or needs. Before acting on any information, you should consider the appropriateness of it regarding your own objectives, financial situation and needs.”