Should You Amend Your Tax Return?

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Apr 03, 2017

You may have felt the dread of realizing you made a mistake on your recently filed tax return. Perhaps you received late documentation that could be used for a deduction. Sometimes you can receive a corrected year-end statement for one of your investment providers. The good news is the IRS allows you to correct your return for up to three years after you file your original return.

Oversights and errors are not uncommon, but you need to inform the IRS you are correcting the return by filing a Form 1040X. This amended tax return details what should be changed and it allows you to explain the reason for your change.

Filing an amended return does not extend the time the IRS has to examine your returns unless your original or amended returns were fraudulently filed. The IRS generally has three years from the date your original tax return was due or from the time it was filed to examine your returns (both original and amended) and to adjust your tax.

While there are exceptions, generally if your amended return is properly prepared, your chances of being audited are probably no greater than they were on your original return.

It is important to consider the size of the refund or balance due before you rush to amend your return. If you are owed a small refund, it may actually cost you more to amend your tax return than to leave the return as originally filed.

If you have discovered income or deductions that you should have reported on your income tax return, give us a call. We can help you set the record straight and pay only the tax due. Terry Lockridge & Dunn accountants can be reached at 319.364.2945 in Cedar Rapids, or 319.339.4884 in Iowa City.

Tags: Tax Planning