Have you ever had the unfortunate experience of doing your taxes and thinking you were finished only to find out that a new form comes in the mail? Or you have already sent in your tax forms and suddenly remember that one form you forgot about. In such a situation, you will need to revise your tax return to account for the missing information. The way to edit your taxes is by filing an amended return. Obviously, this will end up taking more of your time, but it needs to be done in order for you to remain on the IRS’ good side…and to avoid future penalties and fees.
Basically, you NEED to file an amended return if there is any piece of information that will alter your tax calculations. This can go both ways, affecting whether you owe more or less tax. It is also possible to use the opportunity to correct things like your filing status, dependents, income, deductions, tax credits, and more. In other words, if you find another W-2, or remember that there is additional income to report, this would constitute a material change to the overall return. The same thing could be said if you claimed a dependent in error (maybe an older child that is now eligible to claim themselves as a deduction, and decides to do just that, without telling you about it first!).
On the other hand, if there are just simple math errors in your return, don’t worry about filing an amended return. Such edits will normally be handled by the IRS computers directly. They will check your math as a part of their ordinary business and then correct any errors, sending you a statement showing how these change the tax owed or the refund received.
Time Allowed For Making Edits:
You should keep in mind that there are only three years allowed in order to make any such changes that result in higher tax refunds. This is due to the fact that there is a three year statute of limitations on issuing tax refund checks, measured from the date of original filing. So, be sure to respect this time limitation.
There is no time limit, unfortunately, if you need to report extra income. Yes, this is going to mean that you will need to pay more tax to the IRS. There may also be interest charges involved, depending upon the amount of added tax that will be required. Since, the IRS is going to find out about this eventually, you might as well file your own edited return and minimize these interest charges ASAP.
How To Prepare An Edited Return:
This is a two-step process. First, you will need to prepare a new 1040 long form; it does not matter which form you originally used. Obviously, you need to make sure that the new 1040 is filled out as completely as possible. Also, be sure to attach all needed schedules, forms, and documentation to this new form. Include anything that has been added or revised as well.
Then, you will prepare the form 1040X. This basically summarizes information you have filled out on the new 1040. Be sure to follow the instructions, line by line. Also, complete Part III on page two, by giving complete information regarding the changes being made to your original forms. If you have questions about the process contact a tax attorney.
Written by Randy Otis of Levy Tax Help.