The government requires all taxpayers to file their taxes every year. Upon filing taxes, taxpayers sometimes realize that they have made a mistake while filing tax and now the forms they filled for the filing have been submitted to the government. The amended tax return is filed when there is a correction to be made to the previous year’s tax return filing. The correction is usually with regards to the errors in the previous tax return filing. There is no need to amend the tax return in case of a mathematical error because it will be spotted and corrected by the IRS. If you have other errors you would want to correct, then you will have to amend your tax return. There are certain rules you must follow in order to amend returns with much ease.
Amended income tax returns are not mandatory
The government doesn’t require you to file an amended tax return. There is no compulsion to file unless you feel the need to make corrections to your tax filings. The only federal obligation you do have is to file the tax return every year with the IRS, provided your income is more than the requisite level. There are legal prosecutions in case you fail to file your taxes, or wrongly file your taxes. However, not filing taxes have smaller penalties as opposed to filing fraudulently. If you have made mistakes in filing your taxes, and you have not filed an amended tax return to rectify the mistakes, you will not be prosecuted for the same. You can file an amended tax return when you are sure there are certain rectifications required in your tax filings.
Necessary correction should not be avoided
Avoid cherry-picking your corrections once you are filing amended tax returns. When you are making corrections, make sure that you not only rectify those elements that will get your money in return, but also those that will increase your tax liability.
Not all errors require an amended income tax return
As mentioned in the beginning, if you have recalled making a calculation or a small mathematical error in your tax filing, then you do not necessarily need to file an amended return. Similarly, if you discover that you have missed filling a Form W-2, or forgotten to attach certain schedules, or have other mistakes and glitches of these kinds, the IRS process returns them or will ask for the missing information and forms. You need not make an amended tax return.
Timing is important while filing an amended income tax return
Most people are advised to amend income tax return within 3 years of the original return filing. However, you only need to file Amended U.S Individual Income Tax Return, a Form 1040X, within 3 years from the date the original return was filed, or within two years from the day you filed your tax.
You cannot file amended income tax return electronically
Amended returns are only prepared on Form 1040X. If you file an amended tax return, you must use the Form 1040X even if you have filed Form 1040, 1040A or 1040EZ previously. You cannot file amended returns electronically, but only on paper.
Separately amend each year
If you have more than one tax return to amend, make sure you prepare a separate Form 1040X for each tax return.
More than taxes, amended returns are likely to get audited
Your taxes are less likely to get audited, however, if you file amended income tax return, the chances of the amended return getting audited is more.
You can apply refunds to estimated taxes
If you have filed an amended return and have asked for an amount in return, the IRS will review the situation. Hence, for an alternative solution, you can apply part or all of your refund to your current year’s tax.
Interest and penalties
If your amended income tax return reveals that you owe more tax than you filed, you will be levied an additional interest or penalty. The interest you will be charged will be because of missing the due date of the original return. The IRS will calculate the interest you owe and send you a bill. In case you have been imposed penalties, IRS will send you a notice that you can either pay or contest.
After three weeks of you filing the amended return, you can track its status. You can go to the official IRS website and track your return using the tool called ‘Where’s My Amended Return?’. You can also call them to know more about the amended tax return.