Do You Need to Amend Your Tax Return?

Amend Your Tax ReturnWith April 15th behind us, now is the perfect time to review your tax return to see if there was anything you overlooked.

Out of 131 million returns filed in 2014, the IRS projected that 5 million would need to amend their tax return.

Over the course of two decades as a tax preparer I’ve seen everything from forgotten W-2s to forgotten children.

Common mistakes are missed itemized deductions like property taxes, mortgage interest or charitable contributions. Incorrect filing status and dependent information are frequent errors as well.

I also recommend verifying that you included IRA contributions and other deductions against gross income on lines 23 – 35 of form 1040.

Life Changes can Equal Tax Mistakes

For most taxpayers lifestyle changes create the perfect storm for filing mistakes.

If you got married, divorced, had a child, started college, changed jobs, retired or moved to a new house then there is a good chance that your tax return has a mistake on it somewhere.

However, not all mistakes require that you file an amended return. The IRS usually catches simple math errors and will send a letter explaining the adjustment.

5 Tips to Successfully Amend Your Tax Return

Here are some tips for determining if and how you should file an amended return.

  • If you decide that filing an amended return is necessary you will need to use form 1040X.
  • Keep in mind that you have three years from the date of filing the original return to file the amended return.
  • However, if you owe the IRS additional taxes then the sooner you file (and pay!) the lower the interest owed as well.
  • The IRS typically won’t charge a penalty if you pay any additional tax owed with the amended return. Of course if the IRS owes you then what are you waiting for?!
  • Once you have sent in your amended return the IRS has an online tool that you can use to track the status.

Don’t Forget Your State Tax Return

Don’t forget to look at your state return also.

North Carolina adopted some tax law changes after the end of 2014 (Governor McCrory signed into law on March 31, 2015) that early tax filers may not have accounted for. Among the differences are changes in how to handle mortgage insurance premiums and education costs that were deducted on the federal return.

Costly Mistakes

We’ve seen many situations where people try to handle their return themselves but miss something along the way.  That’s why paying a professional to complete your tax return can often payoff.

If you feel your return needs to be amended let us know or reach out to your current tax preparer.

Regardless if you own more than expected or should be refunded tax you paid, it will likely save you money in the long run.

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