A new tax season is almost upon us. This small three letter word, tax, causes heightened anxiety for many working Americans. Our tax system is complicated with many laws, codes, mandates, and processes interwoven into our daily lives.
With this in mind you want to do everything that you can to make this cycle go as smooth as possible, and we are here to help. In preparation, let’s learn more about amended tax returns.
An amended tax return is a system put in place by the IRS for people to make changes or correct errors on their previous tax statements. The IRS grants you up to 3 years from the initial return filing date to file an amended tax return. Even the IRS can give you a second chance!
This document is only intended for folks who have made a mistake or if new financial information comes to light that would alter your tax bill such as a tax deduction you may have left out.
An amended tax return is not for everyone and you will probably not have to file one each tax cycle. An error in your taxes could result in the IRS owing you a rebate check, but in other instances, it could involve you owing the IRS money. For example, if you find that you forgot to include an income source you may owe the IRS some money. As a precaution, include any money owed in the form of a check when you submit your amended tax return. This way you can avoid additional fees and penalties.
Take a close look at your tax return to ensure that your finances have been properly recorded and accounted for. Here is a list of common instances where you would have to file an amended tax return.
Now that you have a sense of what an amended tax return is and when you should file one, let’s outline the steps for doing it swiftly and correctly.
The organization of your paperwork is probably the most important facet of filing your amended tax return. One unique caveat to this process is that you must have a hard copy of your amended tax return and accompanying documents. Even if you filed initially online, the amended return must be a hard copy.
First, identify which tax cycle you have to amend and gather the tax return documents from that year. You will then want to attach documentation validating the error. For example, if you forgot to claim a large deduction from a charity gift include the receipt (be sure it has the date) in your documents.
You will then need to go to the IRS website and download any necessary tax forms for the year you are amending. The only additional documents you will need to include are the ones that you have to amend. You do not have to completely overhaul your tax return.
A 1040x is a form that will indicate the changes you have to make on your taxes. It is a prerequisite for filing your amended tax return correctly. The form will require you to fill out information regarding the changes that will be made. Be sure to check the IRS website for the current 1040x form.
Remember, you have to print this document and send it in the mail!
Now that you have all of your documents in order, have printed them out, and included any necessary payments, it is time to mail your tax return to the IRS. Keeping your documents organized and up-to-date will help the IRS process your claim quickly and more efficiently. Do know that this process can take some time, so it is best to allow for 8-12 weeks for your request to be fully processed.
Sometimes taxes can be difficult and mistakes are made. If this happens, do not panic. File an amended tax return and get back on the financial straight and narrow. If any questions should arise during this process, we would be happy to talk more with you and help in any way that we are able.