Amended Tax Assessment Is Showing Much Higher than Expected

spast1ka on 27/03/2025 - 11:34
Last edited 27/03/2025 - 12:18 by 1 other user

I received a notice of income tax notice of assessment from the ATO about some undeclared income.

Last year during tax return time I foolishly did not declare my ING interest amount of $3550 as it was not pre-filled so I kinda forgot about it and carried on with the rest of the tax return. However, the amended tax return is now asking me to pay $1689 after I had already settled my tax return last year.

This is higher that what I was expecting since I was led to believe savings interest is calculated using the income tax calculator. My total income falls within the $45k-$135k range shouldn't I get taxed 30c per dollar? So $3550 x 0.3 = $1065.

What am I missing here? Is it possible to appeal it if I think it's incorrect?

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Comments

  • prisonerzero on 27/03/2025 - 11:43
    +4

    Do you have a HELP debt?

  • Keplaffintech on 27/03/2025 - 11:45
    +2

    Calculate the general interest charge as well, though it would only account for ~8%

  • forrester on 27/03/2025 - 11:48
    +10

    A part of it could be explained by the tax brackets for the relevant year 2023-2024 being different to what you quoted:
    $45,001 – $120,000 32.5%
    $120,001 – $180,000 37%

    • TilacVIP on 28/03/2025 - 08:13
      +4

      plus the 2% medicare levy

  • Jaduqimon on 27/03/2025 - 11:49
    +4

    HECs debt/medicare levy/GIC

  • redforever on 27/03/2025 - 12:20
    +4

    There is also the medicare levy component for the extra earnings.

  • Ocker on 27/03/2025 - 12:32
    -1

    Most likely ING did not have your TFN recorded and so they deducted withholding tax at the highest tax rate.
    Maybe if an amended tax return was lodged then OP would get a refund of the difference between actual tax bracket and default rate.

    • Jaduqimon on 27/03/2025 - 12:53
      +5

      if thats the case then ING would have witheld the interest and the OP would not have had a tax payable.. would have been a receivable…

    • CheapskateQueen on 28/03/2025 - 06:49
      +1

      op likely lodged tax return really early, before ing had reported interest to the ato

  • Porker on 27/03/2025 - 14:53

    Side item - How did the ATO find out about the money?

    • JIMB0 on 27/03/2025 - 15:31
      +12

      All the banks have to report it to the ATO by a certain date each year. OP has done their tax before this date and missed it in their return. The ATO has later checked and found the shortfall.

      • surfingedge on 27/03/2025 - 17:53
        +6

        Lesson is to not submit your tax return until end of September after all the banks have finished sending over their info.

        Particularly if you hold ETFs, as you won't even know what to fill in for the distribution tax components until the ETF issuer sends you your tax statement.

    • brad1-8tsi on 27/03/2025 - 15:39
      +3

      The ATO has a huge data comparison program. There's not too much legitimate stuff (interest, dividends) that slips by.

  • brad1-8tsi on 27/03/2025 - 15:40
    +2

    You can contact the ATO and ask them to step you through their calcs. They are usually quite helpful

  • Browsers on 27/03/2025 - 21:35
    +1

    OP may have been penalised by the ATO and is charged an additional 50% of the shortfall amount. See their website for the penalty rates they charge, which vary based on the degree of intent behind the error.
    So 30% normal tax rate for the shortfall amount plus penalty of 15% plus 2% medicare levy = 47%, which is approximately the amount demanded by ATO. Worth calling them to check.

    • CheapskateQueen on 28/03/2025 - 06:53
      +2

      no it's highly unlikely a penalty.

      as others have said, OP has been overly simplistic in the calc.. the tax rate he applied might be wrong, plus he needs 2%extra for Medicare plus he could be paying HECS, plus maybe his PHI rebate would be reduced plus maybe other offsets were reduced.. lots of variables

      its usually pretty obvious to see the changes on the amended assessment

  • Triceratops on 28/03/2025 - 07:38
    +6

    If you want everything pre-filled for you then don't do your tax until September.

  • larndis on 28/03/2025 - 08:17

    Is there any extra provided on the amendment that explains how it was calculated? As someone else suggested, if you can't understand the calculation call the ATO and ask.

    I would think an appeal would be an absolute last resort, and you would need very strong evidence of your tax being incorrect (unlikely that 'I thought it should be 30% but it's more' is going to get you far).

  • RMBC on 28/03/2025 - 12:08
    +1

    There are many reasons it may have happened, including:

    • Reduction in private health insurance rebate as a result of increased family income
    • Interest or penalties charged on unpaid tax (although unlikely given the way the ATO accounts for this, however you may be providing the information from an account statement rather than an amended notice of assessment)
    • Tax rate for the 2024 year in that band is actually $45,000 to $120,000 and taxed at 32.5% plus 2% medicare levy, or 34.5%, so if above $120,000 you're in the next tax bracket of 37% plus 2% medicare levy, or 39%.
    • If at the lower end, the low income tax offset was in place in the 2024 year, so if your income increased you may have lost that

    Combining these could easily result in the higher tax amount imposed, however given the vague information provided, it is not possible to confirm.

    • spast1ka on 28/03/2025 - 17:25

      Hi thanks for the detailed response.
      I can confirm I don't have private health insurance so I don't get any rebates. ING only reported my interest earned much later after I'd filed my tax return in July 2024, so I don't think I would be getting charged interest from something out of my control. And the ATO only sent me an amended tax assessment because of ING.
      My gross income after savings interest and wage is still under $120k so I guess i should've been taxed 34.5%, but I was instead taxed around 47.5% ($1689 tax owed from $3550 interest). No HECS debt either.

      • Zombie-Belle on 29/03/2025 - 17:59
        +2

        You need to wait till sept to lodge for the banks to report to ATO if you are earning a significant amount of interest and want it all pre-filled (so you dont get these types issues)

  • doctordv8 on 29/03/2025 - 00:09
    +1

    I think it is a FREE OzBargain style phone call to the ATO.

    They can be a helpful bunch on Tax questions.

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