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Correcting errors
If you make a mistake when reporting investment income information, the Internal Revenue Service has outlined options for correcting it. Depending on the error, you may be able to correct it on a future return, or you may need to amend an earlier return. For errors made within the same tax year, you can correct them on future returns by the next reporting date.
The original return value must be modified if the error is related to:
- Using the wrong IRD number.
- Income information is missing or inaccurate.
- Using the wrong tax type (not a tax rate – e.g. when AIL is deducted instead of NRWT).or
- Relates to tax years prior to the previous year.
An amendment to the original return is also required if the error exceeds the greater of $2,000 or 5% of the RWT or NRWT withholding obligation.
If an error causes insufficient tax to be deducted from a payment, you may reduce subsequent payments to the recipient, recover the amount from the recipient, or adjust the amount of non-cash distributions that are subject to tax. It can be fixed. , unless the amount exceeds his $2,000 or his 5% threshold above, whichever is greater.
If you withhold too much, you can pay the excess amount to your recipient by April 20th after the end of the tax year, provided you haven’t provided the recipient with a withholding slip or dividend statement. Include the refund amount on the same payee’s next return to the Internal Revenue Service. If you do not pay your refund by April 20th, you must notify the Internal Revenue Service.
Submission of investment income return
Depending on the trading volume, declaration of investment income can be done in one of three ways:
- myIR (for less than 2,000 rows per filing instance);
- Upload a CSV file; or
- Gateway Services (automatic submissions from payers to the Internal Revenue Service).
If you have any questions, please contact your regular Deloitte advisor.
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