Taxes are complicated. Even tax professionals and tax computer programs can and do make mistakes when filing your taxes and the IRS is aware and keep track of these mistakes each time you file your taxes.
However, the IRS understands that people and machines make mistakes and offer a way correct any errors that may have been turned in. This deus ex machina is the Form 1040X. This form works to correct errors on all previously filed tax forms: the 1040, 1040A or 1040EZ. Remember that you cannot e-file an amended return. You must send in a paper 1040X.
Among the most common wrong entries that require a 1040X this year are:
- The wrong amount of taxable Social Security benefits was entered.
- The amount of tax entered was incorrect based on taxable income and filing status.
- The amount of tax entered was wrong because tax rates on qualified dividends and capital gains are generally lower than the standard income tax rates.
- The Earned Income Tax Credit was figured or entered incorrectly.
- The last name of one or more dependents doesn’t match IRS records or the records provided by the Social Security Administration.
- The amount of business income or loss was incorrect because there was an error on Schedule C or C-EZ.
If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS processing office. You can find those addresses in the 1040X instructions.
When your amended return nets you more refund money, wait until you have received your original refund before filing Form 1040X, but you don’t have to wait to cash that first refund check. Go ahead and put that tax cash back to good use.
If, on the other hand, your 1040X means you owe Uncle Sam — and yes, you should send in the correct filing information even if it means you owe more taxes — file the amended from as soon as possible. It’s better that you catch the mistake before the IRS does.
JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.