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Posted by Tiffany Gaskin

Situations in Which Filing an Amended Tax Return is Essential

Situations in Which Filing an Amended Tax Return is Essential

There are times you might need to make some adjustments on your tax return even after submission. Filing an amended tax return is the way to go, as a second chance will come in really helpful in such a situation. 

You might suddenly remember that there was an error on your tax return, or you did not claim a crucial deduction. The knowledge of messing up your tax could be devastating as it might translate to lower refunds than anticipated, or in worst cases, dealing with penalties. 

However, the good news is that Uncle Sam gives three years from when you submitted your original tax return or two years from the date of tax payment to claim your refund and amend your taxes.


Here are various scenarios where filing an amended tax return is inevitable

  1. You claimed a personal exemption while your parent wants to make you a dependent 

You submitted your tax return with a personal exemption before your parents. However, your parents needed you as a dependent on their tax return. Also, when you submitted your return, you did not check the box that indicated that anyone could claim you as their dependent on their taxes.

As a result, your parents could not claim you on their tax return. However, if you agree that they can go ahead and claim, filing an amendment is the way to go.


  1. Your W2  had an error, and your employer sent you a corrected version

Mistakes are not limited to people alone, but companies also do. There could be a mistake on your W2 from the payroll department, which will warrant sending you the corrected one. The corrected W-2C form will reveal previous wrong information right beside the new amended information so that you know what to correct. 

You will need to file an amendment if there are changes in numbers and you submitted your return already using the wrong W2


  1. You Didn't Include a Vital Info from a Side Gig.

There was a side gig you had but did not report such extra income on your tax return. You filed your tax without it, and Uncle Sam sent you a CP2000 notice informing you that the IRS has more information than you reported. This is the same as underpaying your tax return. 

Such notice will reveal any income from a side gig that you did not report. Should the info present on the CP2000 be correct, you need not file an amended return except you have extra income, credits and expenses you did not return. 

This means that you do not dispute the notice, but some expenses need deduction, which warrants an amendment. 

To deduct the expenses of your side income, you need to file Schedule C for your side gig and a 1040X. Also, one needs to write CP2000 on the amended tax return, attached to the response form and sent to Uncle Sam by mail. 


Your Filing Status was Wrong 

You were married around late October even though you have been single almost all your life. As a result, your partner assumes a separate return is the way to go with each filing as single. However, according to Uncle Sam, you are married for the whole year once you are by the last day of the year. 

This requires filing an amendment to adjust your filing status. The tax advantages of marriage, and joint filing are higher (better standard deduction as an example), which justifies the amendment.

 

Another Person Claimed your Kid on their Return 

Uncle Sam rejects it as someone else (probably your ex) already claimed your kid as a dependent on filing your taxes.

As per IRS rules, two people cannot claim a kid as their dependent if they want to qualify for the child tax credit. Even if there is a custody agreement or divorce decree in place, Uncle Sam recommends that the parent that houses and cares for the kid for more than half of the year can get the support. 

With this, if you and your partner agreed that you should claim the kid as a dependent, your ex will have to file an amended tax return to exclude the kid from their dependent. When the two parties cannot agree, Uncle Sam will use the tie-breaker rule to decide who gets to claim the kid. 


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Tiffany Gaskin
Contact Member