AMENDED TAX RETURNS
There are times when the tax payer discovers a mistake or omission on the tax return. You can file an amended return if you need to fix an error. You can also amend your tax return to claim a tax credit or deduction. Here are 10 tips from the IRS on amending your return:
When to amend. You should amend your tax return if you need to correct filing status, the number of dependents or total income. You should also amend your return to claim tax deductions or tax credits that you did not claim when you filed your original return. The instructions for Form 1040X, Amended U.S. Individual Income Tax Return, list more reasons to amend a return.
When NOT to amend. In some cases, you don’t need to amend your tax return. The IRS will make corrections, such as math errors, for you. If you didn’t include a required form or schedule, for example, the IRS will mail you a notice about the missing item.
Form 1040X. Use Form 1040X to amend a federal income tax return that you filed before. You must file it by paper; you cannot file it electronically. Make sure you check the box at the top of the form that shows which year you are amending. Form 1040X has three columns. Column A shows amounts from the original return. Column B shows the net increase or decrease for the amounts you are changing. Column C shows the corrected amounts. You should explain what you are changing and the reasons why on the back of the form.
More than one tax year. If you file an amended return for more than one year, use a separate 1040X for each tax year. Mail them in separate envelopes to the IRS. See "Where to File" in the instructions for Form 1040X for the address you should use.
Other forms or schedules. If your changes have to do with other tax forms or schedules, make sure you attach them to Form 1040X when you file the form. If you don’t, this will cause a delay in processing.
Amending to claim an additional refund. If you are waiting for a refund from your original tax return, don’t file your amended return until after you receive the refund. You may cash the refund check from your original return. Amended returns take up to 16 weeks to process. You will receive any additional refund you are owed.
Amending to pay additional tax. If you’re filing an amended tax return because you owe more tax, you should file Form 1040X and pay the tax as soon as possible. This will limit interest and penalty charges.
Reconciling the Premium Tax Credit. You may also want to file an amended return if:
You filed and incorrectly claimed a premium tax credit, or
If you received a corrected or voided Form 1095-A.
When to file. To claim a refund file Form 1040X no more than three years from the date you filed your original tax return. You can also file it no more than two years from the date you paid the tax, if that date is later than the three-year rule.
Track your return. You can track the status of your amended tax return three weeks after you file with “Where’s My Amended Return?” available on IRS.gov or by phone at 1-866-464-2050.
Special Tax items:
Additional Medicare Tax: Some taxpayers may be liable for an Additional Medicare Tax of .9% if the income exceeds certain limits. Here are six things that you should know about this tax:. You must combine your wages and self-employment income to figure the tax.
Net Investment Tax: There may be a 3.8 percent Net Investment Income Tax (NIIT) that applies to individuals, estates and trusts that have net investment income above applicable threshold amounts. In general, net investment income for purpose of this tax, includes but is not limited to: interest, dividends, certain annuities, royalties; income derived in a trade or business (passive activity); net gains from the disposition of property.
Reporting Specified Foreign Financial Assets (Form 8938)
Unless an exception applies, you must file Form 8938 if you are a specified individual that has an interest in specified foreign financial assets and the value of those assets is more than the applicable reporting threshold.
FBAR (Report of Foreign bank and financial accounts)
You may have to file FBAR if you had a financial interest in or signature authority over at least one financial account located outside of the United States; and the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported. The FBAR is a calendar year report and must be filed on or before April 18, 2017 with six months automatic extension. FBAR must be filed electronically through FinCEN’s BSA E-Filing System.
Individual - Form 1040 – April 18, 2017 (6 months extensions available – Form 4868)
There are various limitations, thresholds, & procedures for many of the deduction and filings. Please consult your CPA/Tax attorney/or tax consultant for proper guidance with the above subject matter.
Suresh Kumar, CPA, MBA is the Principal of Kumar Consulting, PA, a CPA & Consulting firm licensed in the states of FL, KS, & MO and maybe reached @ 813-421-5068 or firstname.lastname@example.org/www.kumarconsultingcpa.com.
In accordance with IRS Circular 230, the above information is not intended or written to be used, and cannot be used as or considered a "covered opinion" or other written tax advice and should not be relied upon for the purpose of avoiding tax-related penalties under the Internal Revenue Code; promoting, marketing, or recommending to another party any transaction or tax-related matter(s) addressed herein; for IRS audit, tax dispute or other purposes.