Posted by Karen Munoz, EA

Basic Way to File an Amended Tax Return

Basic Way to File an Amended Tax Return

No one is above mistakes. You might file your tax and discover some errors or miss some breaks; you usually make amends by filing an amended tax return. There is a grace period of three years after the deadline for filing a corrected tax return.

Taking advantage of extra tax deductions or credits equates to more money as a refund. Also, you can avoid any penalties if you are correcting an error.

Some reasons why people file an amended tax return are:

  1. You Missed Important Tax Breaks

Many people suddenly realized some overlooked tax credits and deductions. For an instant, the most often missed credit – the retirement saver's credit can bring down your tax by $1000 (or double if filing as married and joint) as long as you contributed to a retirement savings account. You can contact a tax professional to know if you qualify.

Also, people that made continuing education payments at a qualified education institution might qualify you for lifetime learning credit even if it is a part-time program. 

People who missed any tax credit or deduction have the grace to amend their federal tax returns. With this, they can get an additional refund. 

  1. Changes in Tax Laws

There are times tax laws change after you submit your tax return. The amended return helps you enjoy such a new break. 

It is typical for tax breaks that are temporary to expire after some years and be extended for a while. For instance, some tax breaks that expired in 2017 ended were reactivated by congress in the year 2019 and retroactively extended for 2018. As a result, someone who qualifies for the benefit in 2018 might have filed and will have to file an amended return. 

  1. You got Fresh Info, or there was an error. 

People into a freelance agreement for several firms can easily miss 1099 forms. It is even possible to get some fresh tax forms even after filing or receive an amended 1099 from a firm you worked with. For all these cases, filing an amended tax return is essential. 

Uncle Sam will likely get copies of such forms as well. Chances are, you might get a notice, including interest and penalties, if the data on your return does not correlate. 

Not filing Form 8889 (which reports qualified distribution from an HSA) is another common error. When this form is not available, Uncle Sam will think such withdrawals have taxes with penalties. Uncle Sam will add this to the income alongside a 20% penalty since they didn’t know the money was spent on qualified reasons. 

Filing an Amended Tax Return 

Filing an amended tax return was only possible on paper before, which was long for the reward. It is impossible to file your amended tax return online (for 2019 and 2020, while you file a paper tax return for 2018).

You will still get paper checks for the years Uncle Sam allows electronic filing as the amended return cannot be deposited electronically. You can talk to the tax software provider serving you on their method to file an amended tax return. 

For people submitting a paper return, fill form 1040-X, and indicate the same year you want to amend. There is a distinct column to report the former original amount alongside the changes you made, and the possibility of submitting any extra form influenced by any changes you make. 

One can check the amended tax return status by using Uncle Sam’s Where’s My Amended Return? Tool. With this tool, you will know if the IRS already got your amended return or if they already made the adjustment with a refund, no change or a balance due. 



Karen Munoz, EA
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