Should You File An Amended Return?

This tax season came and passed but you managed to get your taxes done just in time. However, before you could kick back and relax you realized that something was not right. Maybe you got a new W2 in the mail or you realized you could have saved money if you changed your filing status. It’s something that happens to the most careful taxpayers and sometimes it is out of your control. That is why the IRS allows you to amend your return in order to fix the mistakes you made the first time around.

If you do realize that you made a mistake or could have saved more money, don’t just chalk it up to bad luck and wait for the following year. If your mistake causes an inaccurate tax return, you could get in trouble with the IRS. If you could have saved money, don’t waste an opportunity to get that money back.

When to Amend

There are several reasons you might want to file for an amended return. Here are a few things that, if forgotten, should definitely alert you that an amendment is in order:

  • You forgot to claim an additional dependent. Maybe you didn’t realize your elderly aunt who lives with you qualifies as a dependent or maybe you got caught up in replicating your return from last year and you forgot about your new born child! Either way, a dependent can be a significant tax deduction. Conversely, if a child moves out or no longer qualifies you should remove them as a dependent. If you don’t, the IRS will have an issue.
  • Reporting the right filing status is very important. For instance, if you are a single mother with dependents, you should probably be filing as a head of household rather than a single. The right filing status may make you eligible for more deductions.
  • If you receive a new or updated W2 that would change the amount of income you claimed you need to file an amendment. Incorrect or inaccurately reported income is a major red flag for the IRS and may trigger an audit.
  • Forgetting to add or make changes to deductions is an appropriate reason to review your taxes and amend them. You might be overpaying by large margins. Also, if the deductions you did claim are inaccurate this also needs to be corrected.

How to Amend

When you amend you tax returns pay close attention to the details. The IRS will go over an amended return more closely and with more scrutiny than a regular return. To amend your return first you must fill out a new long Form 1040 and be careful not to leave out any necessary information or documents.

Next fill out your 1040X. Make sure you have your original and your new 1040 close by as you complete the 1040X; they need to match line by line. After you are finished, explain your changes on the Part III section. Use simple and clear language but don’t leave out any necessary information.

If you need help or if you are confused about this or any other tax process, contact a professional. Levy & Associates is a group of professional tax specialists who may be able to help with your tax issues. Don’t leave money behind and don’t leave errors in your return. If you made a mistake or left something out, fix it before the IRS fixes it for you.