Wondering how to create tax amendments? Here are a few tips to help you erase those tax errors.
Amending Your Tax Payments and Tax Return Errors
1. Consult With The IRS And Your Tax Preparer
Making an IRS tax payment can sometimes be tough and mistakes can definitely happen at times. If you are unsure of what to do after making a mistake, you can reach out to the IRS directly. Find the nearest Local Taxpayer Assistance Center to address your concerns, and also check your tax account on the IRS website.
You may also ask advice from your tax preparer. Additional consultations may come with a higher price. But, your tax preparer may find possible ways to lessen penalties from your IRS tax payment.
2. Make Arrangements If Your Tax Preparer Made A Mistake
If your tax preparer made a mistake or filed your taxes incorrectly, it is also very crucial that you can coordinate about amendments as soon as possible. Unfortunately, the IRS mandates that you have to be the one paying for penalties. You can contact your tax preparer to make necessary arrangements.
You may also check your contract with your tax preparer, to see if he or she can shoulder the penalties of the tax errors. Some tax preparer firms offer insurance fees for mistakes on tax returns. Reading the statute of limitations also helps. If worst comes to worst, you can file a complaint with the Office Of Responsibility at the IRS.
3. Know When To Amend
Fortunately, the IRS allows us to correct our mistakes if we make one. Remember, if the changes in your tax returns will change the taxes you are required to pay, then you need to file for tax amendments. The following cases require a formal filing of tax amendment:
• Modifications in content of necessary forms and schedules
• Changes in filing status
• Updates on the number of dependents
• Unstated changes in the amount of income earned
• Requests for claiming or removal of tax deductions or tax credits
4. Know When To Not Amend
Also, there are mistakes on tax returns that do not require filing for tax amendments. You don’t need to file an amendment if you committed these mistakes:
- Forgot to submit a supporting document
- Failed to attach a schedule or a required form
- Erroneously created math errors
The IRS will contact you in writing to request any additional files. The IRS will also automatically correct math errors in your tax returns.
5. Prepare Form 1040X
If you have confirmed that you need to file for tax amendments, you can now proceed to filling out Form 1040X. This is different from what you use for a regular IRS tax payment. Both individuals and business taxpayers are required to use this form. A tax checklist may also come in handy for you to not miss tax errors.
On the first page of Form 1040X, there are three columns. In Column A, put the amounts that you originally stated in your initial IRS tax payment. In Column C, put the corrected figures. Put all the net differences or changes between these two columns in Column B.
The second page of the form is where you put all the explanations behind the differences and the tax errors. Make sure to provide all information available.
6. Submit Form 1040X Via Certified Mail
Unlike filing for initial tax returns, tax amendments cannot be filed electronically. Send the Form 1040X to the IRS via certified mail, along with revised forms and schedules if applicable.
If you are filing amendments for more than one year, you need to file a separate form for each year. This is to properly reflect the tax errors incurred per year. If you are claiming a tax refund, you can file the Form 1040X within 3 years from the filing date of your original tax return.
7. Pay Additional Tax Or Penalties If Necessary
Once you have confirmed that you have to pay an additional IRS tax payment, do so immediately to avoid more penalties. Penalties and interest charges will stop piling up as soon as you settle your whole tax debt. You may also familiarize yourself with the different types of penalties to be more aware of them.
After paying, remember to always store a copy of your amended tax return and tax payment. These may come in handy just in case IRS asks for proof of payments.
8. File An Amended State Return If Necessary
Aside from amending your Federal tax return, you may also need to file for a State return to reflect the Federal changes. File the State return amendment as soon as you submitted your IRS tax return amendment to avoid additional interests and charges your State may impose. Filing your State tax amendment early may also help you claim your State tax refund faster, too.
9. Track The Status Of Your Tax Amendment Form
You can track the status of your amendment return at least 3 weeks after you filed it through the IRS website. You can also call 866-464-2050. Processing time may take up to 16 weeks.
Always remember that the IRS will first reach out to you via mail. The IRS will never contact you via social media or text messages. There are reported incidents where people are victimized by scammers pretending to be IRS authorities on the phone, so be wary.
Here’s a guide on how you can file for your own taxes.
Filing for tax amendments may seem intimidating. Penalties and other charges may sometimes magically multiply themselves. But at the end of the day, there may be different treatment options you can choose from. As long as you follow the IRS’ required procedures, you can erase those tax errors in no time.
How do you avoid tax errors? Share your tips in the comments below!