When To File An Amended Return
Taxes are a big deal, so it's no surprise most people take a great deal of time preparing and filing their taxes. However, mistakes are inevitable. The IRS, fortunately, does leave room for error and allows you to file an amended tax return for a period of up to three years. If you've run into a mistake, but aren't sure you should file an amended return, learn about some of the scenarios when it makes the most sense.
Additional Income
If any time after you file your tax return you get a tax form, such as a W-2 or 1099, for income that you did not include on your return — you need to file an amended return. The amount of money you owe in taxes is based, in part, on your earnings. Consequently, you could owe more taxes.
Keep in mind; the IRS will receive the same income information you have. As a result, it's just a matter of time before you could receive a notice for unpaid taxes, so it's best to be proactive and file a corrected return.
Dependents
An error with your dependent elections is also worthy of an amended return. For example, if you and your ex-spouse share equal custody of your children, you two might alternate on who gets to claim the children as dependents every other year.
If for some reason you forget this was your year and you did not claim the children as dependents, you could file an amended return notating this change in exemptions. However, it's critical to ensure your ex did not claim the children, claiming the same child twice can lead to a number of problems.
Credits
Unless you are a tax professional, it can be difficult to know every single tax credit you are entitled to. In fact, sometimes people don't find out about this information until after they have filed. For instance, if you were a student and forgot to file the Lifetime Learning Credit or American Opportunity Tax Credit, you could file an amended return to receive these benefits.
Remember, you don't want to miss out on any credits you are due. It's a good idea to work with a tax preparation consulting professional who can review your information and ensure you take advantage of every credit available to you.
Whether you are receiving a refund, or you owe money to the IRS, you want your tax record to be accurate. If you detect an error with your information, contact a tax preparation professional to prepare an amended return.
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