It is always in your best interest to file for an amended tax return if you found out that there were mistakes on last year’s tax return or the one you just sent off in the mail. You do not want the IRS to learn about the discrepancy because this could lead to serious IRS problem for you in the future. There are instances when the IRS simply identifies and rectifies math errors and informs you of any changes. This will not necessitate you to file for an amended tax return. However, there are certain errors that you do not want the IRS to discover themselves and that call for you to file the amended tax return.
The most common errors are related to your deductions or credits, your total income, dependents and filing status. When you send a corrected tax return to the IRS, you may even be able to receive a refund. But if the error you made does not lead to you receiving more money, and in fact incurs any penalties, it is best to own up to that mistake as well.
Tax returns submitted through Forms 1040EZ, 1040A or 1040 can be amended using Form 1040x, Amended U.S. Individual Income Tax Return. Be sure to mail your requests for amendments as the IRS electronic system still doesn’t accept Forms 1040x. Essentially, pieces of information that need to be corrected as well as the reasons for such are the items that you will put in the 1040x.
The usual reasons to filing for amended tax returns include a correction in filing status. Taxpayers normally change status from single to a head of household filer. Such change entitles you to a refund as there is a considerable difference in the deductions available to those who qualify for head of household status.
If you have dutifully paid the taxes on the tax return in question, you may file for an amendment within the three year period following the return’s filing date. Otherwise, your grace period is lessened to only two years.
If you have discovered an error in the return you recently filed, it is best to wait until a refund is received and all the paperwork has been processed before you file for an amended tax return. This saves you from any mix up in your tax records or any duplication in your paperwork.
On the other side, there are circumstances when additional costs are incurred when filing for an amended tax return. No matter how tempting the choice of simply running away is, honesty and filing for an amended tax return will always pay off in the long run. This will truly avoid future problems as the IRS will eventually find out about this mistake. Also, there is also a higher possibility that the IRS will charge lesser fees to mistakes brought to their attention.
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