IRS Audit, IRS Problems, Tax Audit
Amended Tax Returns – Everything You Need To Know
April 12, 2013 - IRS Audit, IRS Problems, Tax Audit
Can you “fix” your tax return?
I don’t mean toy with the numbers. Not THAT kind of fix. I mean repair or correct a return that has already been filed.
Yes, you can fix a mistake on your tax return. This is called AMENDING your tax return. You file an amendment to your tax return. This is an amended tax return.
Form 1040X is the special form used to file a change to an original 1040 series return. Use the 1040X to “fix” a 1040EZ (the easy form), a 1040A (the short form), a 1040 (the long form) or even a 1040NR (the form used by non-residents with income from the United States).
Some of my clients are frustrated when I wait to finish their tax return. And that turns out to be the BEST thing we could have done. Because while they think we’re finished and ready to file, later comes a corrected form or a late-issued form that usually means more tax is due. If we had filed the tax return early in the season, we would be filing an amended return now.
Amended returns are not just for current tax year returns. They are not just for the 2012 tax return you are filing in 2013. Sometimes there is a balance due the IRS. Sometimes the IRS owes YOU a refund.
Tax returns have a time limit for the IRS to review what you have voluntarily filed. Tax returns also have a time limit for you, the taxpayer, to file a claim for refund. You can file an amended return for any tax return that has not run out of time, or “the statute” has not expired.
You might be like one of my clients. We are filing for a solar water heater credit on their 2012 return. AND we are filing a 1040X, amended return, for 2009 to claim the credit for qualifying windows they installed that year. If we waited until after April 15, 2013, we would have run out of time to file that 1040X for 2009 and they would have lost their chance to “claim” that year’s energy credit.
Another client is new to me this year. He is retired from the fire department. He has his health insurance premiums withheld from his pension benefits. I learned that this qualifies for a special treatment on his tax return. The preparer he used the last three years didn’t know about this special treatment. So I am amending his 2009, 2010 and 2011 returns to claim a larger refund. That 2009 1040X will be filed before April 15, 2013 so he doesn’t lose his refund for that year. The other years will be filed now, too. They will each go in their own separate envelope to the IRS.
Another client is going to have to amend his 2011 tax return for additional income he just found out about. In this case he’ll have to pay more tax. But by coming forward voluntarily, he will avoid some penalties that IRS would definitely assess if they had to tell him that he owed money. IRS punishes you with penalties when they have to hunt you down.
There are many different situations that will cause you to file an amended. Can you think of a reason why any of your tax returns should be changed? Did you realize you claimed too much of one deduction? Did you realize you have MORE deduction you are allowed to claim. Did you find out something you didn’t know when you first filed your return?
Preparing the 1040X form is a little more complicated than preparing a return the first time. Don’t be afraid to get some help with this one. IRS will take a close look before they send you money. You’ve waited this long. You don’t want to run out of time to claim the money you are entitled to.
Always to your lowest legal tax,
Nellie T Williams, EA