It’s generally not ideal to have to file amended tax return. There’s nothing quite like the shocking discovery that the one event of the year you look forward to least—tax time, is not nearly as over as you thought. It’s sort of like discovering that there’s an epilogue to the M. Night Shyamalan film you’re watching. Fortunately, unlike Shyamalan, there is a cure for the persistence of tax-induced blues. There are several reasons to file an amended return and a few not to. For instance, if you believe there was a simple math error that is easily spotted. It’s quite reasonable that the IRS will be able to catch this mistake. And they will make the necessary correction without requiring an amendment.
Just when you thought it was safe to stop talking to the IRS.
Let’s look at some of the reasons for filing an amended return. A major factor for why many individuals choose to file an amended return is to include deductions and credits that were previously not accounted for. If you made a serious mistake (more than a simple math error), filing an amended return can be essential for staying out of trouble.
Sometimes, amended filing are necessary because of worst-case situations: theft, disaster, and property loss. These can be situations where you made an estimate on the value of an asset. Then you discover later that this value had to be adjusted. Or it can simply be a situation where you filed early. And the income or other values that you reported aren’t what your tax source documents (arriving later) confirmed to be. Therefore all the reasons for filing an amended return fall into one of two camps:
The first form you’ll need to be aware of is the 1040X. The IRS describes the purpose of this form as being several fold:
Making changes to designations such as dependents, altering amounts that had been modified by the IRS, and other alterations are the main purpose of the 1040X. A few important things to remember when filing an amended return:
-Specify the year of the return you’re amending (don’t just assume they know it means last year)
-If you’re looking to amend multiple tax years, you’ll need a separate 1040X for each one.
-If changing your federal returns will affect your state taxes, you’ll need to contact your state agency to see what actions need to be taken.
Whether you just want to take a second glance at your tax situation to make sure you’ve covered your bases and dotted every ‘i’ or you’re looking for guidance on preparing an amended return, you need to call Business and Financial Solutions. We specialize in helping you break through bureaucracy without breaking your wallet.