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May 2017 Tip of the Month

How We Respond to Questions on Amending Your Tax Return

At Abo and Company we are often asked to fix errors or omissions on a taxpayer's tax return by filing an amended tax return (no, we didn't say that we caused it, that it was necessarily the client or their prior accountant's fault - mistakes often just happen, hopefully inadvertently).

For those do-it-yourselfers, below are some IRS approved tips (those who have seen a screwdriver or hammer in Marty Abo's or Pat Sharkey's hands know how they feel about such do-it-yourselfers). Before you get started "Mr. I-Can-Do-It-Without-A-CPA", how about reading the small print just above the signature line of your 1040...

"Under penalty of perjury, I declare that I have examined this return and accompanying schedules and statements, and, to the best of my knowledge and belief, they are true, correct, and complete."

Just in case, here's what you need to know in amending your tax return:

  1. File using paper form. Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct the tax return. You can't file amended returns electronically but can obtain the form on IRS.gov/forms at any time.  After you complete it (yeh, right) you then mail the Form 1040X to the address listed in the form's instructions
  1. Amend to correct errors. File an amended tax return to correct errors or make changes to an original tax return. For example, you should amend to change your filing status, or to correct your income, deductions or credits. 
  1. Don't amend for math errors, missing forms. You generally don't need to file an amended return to correct math errors on your original return. The IRS will automatically correct these items. In addition, you do not need to file an amended return if you forgot to attach tax forms, such as a Form W-2 or a schedule. The IRS will mail a request to you, if needed.  Of course, no one likes to get letters from the taxing authorities or have their returns looked at which is why we try to be such sticklers in reconciling what clients provide with 1099s, w-2s, k-1s, etc. the clients receive. 
  1. File within three-year time limit. You usually have three years from the date you filed the original tax return to file Form 1040X to claim a refund. You can file it within two years from the date you paid the tax, if that date is later. That means the last day for most people to file a claim for a refund for tax year 2013 was April 18, 2017 (sorry if you missed that). See Form 1040X instructions  for special rules that may apply. 

As we pointed out in a previous email alert, here's a little helper to find out "wassup". If you go to the Tax Center tab on Abo and Company's website, www.aboandcompany.com,  under the caption "Track Your Refund" you'll find a link to check the status of your refund(s). 

  1. Use separate forms for each year. If you are amending more than one tax return,  you must file a Form 1040X for each tax year. Mail each year's Form 1040X in separate envelopes to avoid confusion. Note the tax year of the amended return on the top of the Form 1040X. Check the form's instructions for where to mail the amended return. 
  1. Attach other forms with changes. If you use other IRS forms or schedules to make changes, you need to attach them to the Form 1040X. 
  1. Wait to file for corrected refund for tax year 2016. If due a refund from your original tax year 2016 return, you should wait to get it before filing Form 1040X to claim an additional refund. Amended returns may take up to 16 weeks to process. 
  1. Pay additional tax. If you will owe more tax, you should file Form 1040X and pay the tax as soon as possible to avoid penalties and interest. Consider using IRS Direct Pay to pay any tax directly from a checking or savings account at no cost.  We typically advise against the use of credit cards (it's more expensive than you think the mileage you think you'll earn.) 
  1. Track your amended return. Generally, you can track the status of your amended tax return three weeks after you file with 'Where's My Amended Return?'. It is available in English, Spanish, Chinese, Korean, Vietnamese and Russian. The tool can track the status of an amended return for the current year and up to three years back. If you have filed amended returns for multiple years, you can check each year, one at a time.

You should keep a copy of your tax return. Beginning in 2017, taxpayers using a software product for the first time may need your Adjusted Gross Income (AGI) amount from your prior-year tax return to verify your identity.