Posted by Don Bell Law

When Do You Need to Amend Your Tax Return?

When Do You Need to Amend Your Tax Return?

When Do You Need to Amend Your Tax Return?

Filing an amended tax is a nightmare for many people. You have tried your best to be diligent with the preparation. You spend sleepless nights to ensure you ticked every box and applied all necessary deductions. You did everything you thought should be done. Weeks and months go by, and you made that dreaded discovery – a vital tax document you did not include. You were paralyzed with fear as the worst scenario, and penalties from your Uncle Sam starts playing in your head.

This situation is where filing an amended tax return comes in. 

What is an Amended Tax Return?

You file an amended tax return (an official IRS document) after discovering new information on your tax that could affect your filing. It is a provision the IRS made for taxpayers to make an amendment officially to a tax filed already.

As soon as you notice an error on a previous year's tax return, it is essential to file an amended tax return. Fortunately, you do not need to file an amended tax return for every error.

Here are common cases alongside what you need to do. 

  1. You Just Have to Know of a Deduction You Qualify For 

People save on tax via tax deductions, which could save people hundreds of dollars, provided you qualify. As a result, not claiming them is an error you do not want to commit. Going through the standard deduction route is a way to ensure you claim them. As a result, file an amended tax return if you knew about a deduction you did not claim.

  1. You Had an Error In Calculating Your Income 

Humans are prone to mistakes, which is not a big deal. There could be simple math mistakes, for example, in estimating your itemized deductions and tallying your income. This mistake does not need an amended tax return as Uncle Sam is generous enough to amend simple math errors. They will correct and inform you of any adjustments made.

  1. Another Income Document Came After Completing Your Tax Return 

Your income amount is a principal factor in determining your tax liability. A slight adjustment in your income could send you to another tax bracket. With this, be sure to file another tax return immediately after filing the prior one you filed, prior. If not, Uncle Sam could later discover that you didn’t do so, and they could interpret this as tax fraud.

  1. You Missed a Vital Document in Your Return

There are cases you might miss attaching an essential document to your return. This does not call for an amendment. As long as the document is vital to your tax return, the IRS will reach out and request such a document.

  1. Someone Claimed You as a Dependent, and You Didn't Know.

You might file early in a bid to get the tax issue off the way and move on with life. You might claim a personal exemption to discover that you were claimed as a dependent by your parents. This case calls for filing an amended tax return. There are, however, two ways to rectify this:

  • You send in an amendment indicating that you can be claimed as a dependent

  • Your parent will file an amendment to remove you as a dependent


How Long Do You have to File an Amended Tax Return 

Luckily, anyone can file an amended tax return at any time of the year. There is a 30 years bracket from the time of the processing of your tax return. You, however, need to file within three years if you are expecting a tax refund with the amended refund

While you can amend your taxes after three years, it cancels your eligibility for an updated refund. In the same way, there is a 3-year statute of limitations on tax audits. It becomes bookkeeping with the IRS at this point.

Amended Tax Return and Audit Risk

It is essential to have in mind that submitting an amended tax return will not, in any way, subject you to a tax audit. Submitting an amended tax return only admits you have an error, not a deliberate intent to defraud that could trigger an audit.



Don Bell Law
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