8 Simple Steps For Amending a Tax Returnfiling taxes can be overwhelming, amending a return is simpler than you might think with a few key actions:
1) Anticipate – Go ahead and assume at some point you are going to need to amend a tax return and be prepared.
2) Consider Delegating – A CPA or Tax preparation agency is more than happy to do your amendment for a fee. If the amendment will potentially result in tax refund, the fee may be well worth it to have a professional look at your overall return for additional opportunities.
3) Know When to Amend – An amended return is needed for:
- Updates in your filing status
- Correcting your reported income from a W2, 1099 etc.
- Correcting Additional Withholding amounts from a W2, 1099 etc.
- Adding or removing dependents
- Claiming or Removing tax credits
- Changing deductions (above the line, itemized or standard)
- Updating personal exemptions
5) Know How – to file the paperwork properly:
- Use FORM 1040X Amended U.S. Individual Income Tax Return, to amend tax returns originally filed with forms, 1040, 1040A, or 1040EZ
- The form has to be filed via paper
- There is a three year window to file an amendment
- If you have multiple amendments, make sure you file a different form for each year and mail each in its own envelope
- You will need to fill out an updated 1040 to correctly fill out the 1040X
- Include all updated schedules and supporting documentation
7) Manage the Money – For an additional refund, cash the original check from your taxes while waiting for the amendment to be processed. If you owe additional tax, try to pay before the due date to limit penalty charges.
8) Don’t forget the State – If you need to adjust your Federal tax return, chances are, you also need to adjust your state. Be proactive and check out your state’s guidelines.
The IRS will review the amendment closely and inform you if they have any questions. While filing a tax amendment can seem daunting, it is truly just another fact of life and part of being in a modern society. The important thing to remember is that it is better for you to file an amendment, than to wait to see if the IRS “catches” something. You might miss out on a refund or owe taxes that are now financially inconvenient. If the sure things in life are death and taxes, isn’t it better to deal with taxes?
By InvestorGuide Staff