What triggers an amended return? When your client forgets to submit information or when in the midst of the tax season crunch the return has just been processed by your firm but has not provided maximum tax benefit to client. In addition any of the following can trigger an amended return:
Reporting additional income on your 1040
Receipt of a revised K-1 from a trust, estate, S-Corporation or partnership
Reporting additional withholding from a 1099 or W-2
Claiming additional dependents
Removal of dependents previously claimed
Change in personal exemptions
Claiming additional tax credits
Non-inclusion of deducible expenses
A Form 1040X alongwith corrected Form 1040 with the necessary schedules should be filed. An amended return is processed in about 7-12 weeks by the IRS.
For an amended return:
a. If a refund is due the amendment should be filed within three years from the filing date when the original return was due or two years from date of payment of tax whichever is later.
b. For calculation errors or missing attachments an amendment is not required.
c. Filing status can be changed from ‘married filing separate’ to ‘joint’, or ‘qualifying widow(er)’ to ‘head of household’ status. However change in status from ‘married filing joint’ to ‘married filing separate’ is not allowed after the actual due date for your original return has passed. (April 15)
d. You cannot pick and choose your corrections on an amended return – if you do file an amended return, file after correcting all errors, including those that get you refunds and those that increase your tax liability.
e. For claiming an additional refund, wait to receive the original refund before filing Form 1040X. Check from original refund can be
f. If amending more than one tax return, prepare separate Form 1040Xs for each return, and have them mailed out in separate envelopes too. Even if the original return has been electronically filed, you can amend it only on paper.
g. Usually, the IRS has about three years to audit a tax return. The three-year special statute of limitations does not apply for an amended return. Work on the assumption that every return is examined – an amended return is even more likely to be examined.
Finally a detailed covering letter emphasizing the changes made in the amendment gets the return processed quickly.
For any queries on this article please e mail email@example.com for our tax experts or like many of our clients, we can prepare your tax returns for you.