Let’s Make Amends

Let’s Make Amends

If you've found errors on your tax return after it’s been filed, you may need to file an amended return, depending on the type of error and the circumstances of the return. However, determining when to file an amended return can be a complicated process.

In some cases, taxpayers may notice that their previous year dividend income has changed after they received their statement from their financial institution. If the change is a minimal amount, despite being enough to warrant a small refund, many financial counselors recommend ignoring the difference. Often, it’d cost more to file the updated return than it’d be worth.

However, if you are notified of a pending refund that concerns a large sum of money, you’ll want to change your tune. The IRS suggests that you file an amended return if there was an error in filing status on your original return. Filing status can affect income, deductions, and credits, and taxpayers who file an amended return should use Form 1040X. It’s also necessary to determine the specific requirements for your state, and abide by them.

According to the IRS, the best practice when expecting a refund from the original return, is to wait to file your amended return until you after you’ve already received the refund. It can take 12 weeks to process a Form 1040X request, but it is acceptable to cash the original refund check while waiting on an amended return.

If you owe additional taxes, the IRS expects payment of the balance as soon as possible. You should abide by this expectation in order to avoid unnecessary interest and penalties.

The status of your amended return is available three weeks after you submit. You can check the status via the IRS website (irs.gov) and clicking on the link: “Where’s My Amended Return?” If you don’t have access to the internet, you can call the IRS hotline at 866-464-2050. The tracking system can provide the status of an amended return for the previous three years.