For many people, filing a tax return is a complex matter. In some cases it usually happens that by accident some document was not included, or simply people, including accountants, do not realize or are not aware of certain rights to deductions or credits they may have. To correct this, a tax amendment must be made, which will change any erroneous information to give the correct tax calculation result.
Making an amendment to the tax return is about defining the calculation of the tax return, since making a mistake in the filing the calculation of the tax return must be incorrect. That is why when amending many times we verify if less or more money is owed, if the amendment is not carried out the tax authorities may start to accrue additional interest and penalties for an error, as well as additional refund may be lost.
In the case of filing an error on your tax return, remember that going through the amendment process will always be the best option. The Internal Revenue Service contains a simple process to amend and issue the tax return. And in this post we will show you the easiest way to do it, here you can find out how to amend the tax return.
What to do if there are errors on your tax return?
Many people choose to allow the Internal Revenue Service or IRS to fix the error. They can correct computational errors, mathematical errors and have them reflected. Fortunately, in certain cases the IRS requests the estimated payment, which was missed, relatively harmless errors such as these can be corrected by the agency. If this happens, the IRS will send you a letter informing you of what happened.
Another option is to file an amended return to correct the errors made. In the event that the IRS does not resolve the error, or if it is a really big error, such as not reporting that you are married, you will have to file an amended return.
There are chances that certain people are due a refund, and if that is the case you should reflect it on your tax return in the following year, or unless you receive a refund check in the mail. And if that does not happen, what you must do is to issue a claim which is filed on Form 1040X, after three years when the original return was filed. Or in any case after two years from the date the tax was paid.
It is completely normal that many people do not fully understand how to file an amended return. If this is your case do not worry, there are professionals in the area that will be able to help you and guarantee the filing of your return. What you need to do is to locate a person who provides services in your local area.
Cases in which a tax return can be amended
One of the cases in which you can file an amended tax return is when you have missed out on valuable tax benefits. There may be times during the course of the year when we may realize that we overlooked and did not take advantage of certain tax credits and deductions.
An example of that is when people miss out on the retirement savings tax credit. However, if that is the case, you can amend your federal income tax return to get the tax benefit and of course collect an additional refund. On the other hand, if the state tax return is amended, it is also very likely to obtain additional benefits.
Another reason to amend a return is when there have been significant changes in the tax law. In many occasions the tax laws make changes without prior notice, which means that a person could have filed a tax return and not applied the corresponding changes due to ignorance of them. In these cases an amended return can be filed so that the new tax benefit does not go unnoticed. Although there are tax benefits that expire temporarily after a certain period of time, to be later retro-activated.
There are situations where mistakes are made or new information is received too late. For the most part, people who work independently for various companies often forget to add a 1099 form by mistake. They may also receive late forms after they have already filed their tax return. Whatever the case may be, you must file an amended return to correct the errors.
There are common or frequent mistakes that usually happen to many people, one of them is forgetting or omitting all income identifications that reflect the forms. For example the sale of cryptocurrencies, on the first page of the 1040 form requests that the sales of these virtual currencies are alleged. Another case is forgetting to declare form 8889, in which distributions from a medical savings account must be filed.
And the last circumstance is due to the notice issued by the Internal Revenue Service, when the information on the copies of the forms does not coincide at all with the tax return. In any of these cases it is recommended to file an amended return, because if you do not do so then the IRS will apply additional penalties, taxes and interest.
How to amend a tax return?
We know that filing a tax return is an arduous and complex process, and when it comes to amending the return it becomes a bit more tedious. However in this post we will teach you how to prepare an amended return step by step.
Step 1: Have all the new tax documents at hand.
Gathering each of these documents is all about including any new forms requested, such as a W-2 or 1099 if it’s the case that you reported less income. Now if you are claiming a new credit or deduction, it is important that you have a document to support the claim. You should also have a copy of your original tax return.
Remember to attach only the requested documents, such as copies of specific schedules or any forms affected by the change, that were not previously attached. The Internal Revenue Service instructions clearly specify that documents that have not been requested should not be attached.
Step 2: Obtain Form 1040X
To issue an amendment to the previously filed tax return, you must follow the following instructions very carefully. The first thing to do is to download and fill out IRS Form 1040X, better known as the Amended Federal Tax Return. This form is relatively short and is the only form that should be used to fix or amend the errors made.
In addition to the 1040X form, a copy of the previously filed tax return must be on hand. In the following points you will we will show you which applications the columns of the 1040X form present:
Column A: you will be asked for a brief summary of the items on the tax return.
Column B: you will be asked to indicate which are the adjustments for payments, income, liabilities and deductions.
Column C: you will be asked (as on the original tax return) to list the exact amounts.
Step 3: Identify and report the error(s) that need to be corrected
To correct the error(s) on the original tax return you should have an unfilled copy of the same form for that year. Doing so will help you recalculate your taxes, and of course you will be able to see the numbers to be changed from the original tax return on the amended return.
It is important to mention that changes made to one item may also change other items on the return. That is, if adjusted gross income is changed, items such as some tax credits, itemized deductions, and social security benefits may also change. For the most part this applies to changing marital status for filing purposes.
Step 4: Attach new schedules and forms
The Internal Revenue Service is only interested in updating or modifying erroneous figures that need to be changed. Many times a tax return is not required to be completed again, although in some cases some attachments must be attached to the 1040X form.
Step 5: Complete the 1040X form according to the instructions.
It is also imperative that the IRS agency knows exactly the history of why you are filing an amended return. This description cannot be lengthy, it must be detailed, concise, accurate and above all very brief. A practical example of this is reporting that you forgot to claim the child tax credit, or that you did not report the income because you received the form too late. The only way to file an amended return is to fill out Form 1040X with all the appropriate information, print it out, and then mail it in.
In the event that you owe money due to the filing of the amended form, it must be included and cancelled. Now if the amended return issues that the balance is correct, then the payment should be included with the corresponding refund. The IRS allows payment arrangements to be made in the event the filer is unable to pay the full balance. However, this does not inhibits the possibility of interest owed and penalties from the Internal Revenue Service.
Tips for Amending Your Tax Return
There are people who worry about making mistakes on their tax return, or forgetting to claim a deduction or tax credit. And if that is your case, don’t worry, there is a solution for everything and your tax return can be fixed by filing an amendment. So today we will give you some valuable tips that will help you to prepare an amended return without any problem.
- When should you amend your tax return?
A tax return should be amended in case you need to correct certain errors, such as marital status, number of dependents claimed or total income. It can also be amended when you want to claim tax credits or tax deductions. However, when you download Form 1040X from the IRS website you will find other circumstances in which a tax return should be amended.
- Under what circumstances should a return not be amended?
The Internal Revenue Service often fixes simple mathematical errors on tax returns when they process them. They also send you a notice when they have failed to include an attachment or form on the return. As long as they are only those types of errors, it is not necessary for the person to amend his or her tax return.
- What should I do if I file an amended return after the end of the year?
In order to correct errors on a tax return after more than one year, the 1040X form must be used for each of the tax years. After that they must be mailed to the Internal Revenue Service in separate envelopes.
- Understand how to fill out the 1040X form
This form contains three columns distinguished by a letter each. In the first column, identified by the letter A, you should enter the figures from the original tax return. For column B you must describe the net decrease or increase of the figures that are being modified. And finally, in column C, the correct and accurate figures must be entered. It is important to mention that on the back of the same form a brief explanation of why the change is being made must be added.
- Is it mandatory to file other attachments and forms to the amended return?
It is mandatory if the case warrants it, and if so, the person must verify to attach everything to the 1040X form before filing it. If this is not done, the process of amending the tax return will be delayed indefinitely.
- When should the amended return be filed?
The IRS allows an individual to file an amended return within three years. Of course, that period begins to run from the time you filed your original tax return. However, the Internal Revenue Service also gives you the opportunity to file the form within two years from the time you canceled your taxes, if the date is after the three-year period.
- Can the amended return be traced?
Only three weeks after filing the amended return it may be possible to track the status or processing of the return. This is done with a tool that is available on the IRS website or you can also do it by calling 866 464 2050.
