by Fresh Start Tax | Apr 18, 2017 | Tax Help
Tips to Keep in Mind When Amending Your Tax Return
Taxpayers can fix mistakes or omissions on their tax return by filing an amended tax return.
Those who need to amend will find the following tips helpful.
1. File using paper form.
Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct the tax return. Taxpayers can’t file amended returns electronically. They can obtain the form on IRS.gov/forms at any time. Mail the Form 1040X to the address listed in the form’s instructions.
2. Amend to correct errors.
File an amended tax return to correct errors or make changes to an original tax return. For example, taxpayers should amend to change their filing status, or to correct their income, deductions or credits.
3. Don’t amend for math errors, missing forms.
Taxpayers generally don’t need to file an amended return to correct math errors on their original return. The IRS will automatically correct these items. In addition, taxpayers do not need to file an amended return if they forgot to attach tax forms, such as a Form W-2 or a schedule. The IRS will mail a request to the taxpayer, if needed.
4. File within three-year time limit.
Taxpayers usually have three years from the date they filed the original tax return to file Form 1040X to claim a refund. A taxpayer can file it within two years from the date they paid the tax, if that date is later. That means the last day for most people to file a claim for a refund for tax year 2013 is April 18, 2017. See Form 1040X instructions for special rules that may apply.
5. Use separate forms for each year.
Taxpayers who are amending more than one tax return must file a Form 1040X for each tax year. Mail each year’s Form 1040X in separate envelopes to avoid confusion.
Note the tax year of the amended return on the top of the Form 1040X. Check the form’s instructions for where to mail the amended return.
6. Attach other forms with changes. If a taxpayer uses other IRS forms or schedules to make changes, they need to attach them to the Form 1040X.
7. Wait to file for corrected refund for tax year 2016.
If due a refund from their original tax year 2016 return, taxpayers should wait to get it before filing Form 1040X to claim an additional refund. Amended returns may take up to 16 weeks to process.
8. Pay additional tax.
If the taxpayer will owe more tax, they should file Form 1040X and pay the tax as soon as possible to avoid penalties and interest. Consider using IRS Direct Pay to pay any tax directly from a checking or savings account at no cost.
9. Track your amended return.
Generally, a taxpayer can track the status of their amended tax return three weeks after they file with ‘Where’s My Amended Return?’ It is available in English, Spanish, Chinese, Korean, Vietnamese and Russian.
The tool can track the status of an amended return for the current year and up to three years back. If a taxpayer has filed amended returns for multiple years, they can check each year, one at a time.
Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity.
Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.
by Fresh Start Tax | Apr 18, 2017 | Tax Help
The Internal Revenue Service has received 103.6 million 2016 individual income tax returns as of April 7 and expects millions more to be filed by the April 18 deadline. Special filing deadline rules apply to members of the military serving in combat zones, those living outside the U.S. and those living in declared disaster areas.
The IRS also expects more than 13 million taxpayers to request a filing extension, giving them six additional months to complete and file their tax return.
Who Needs to File?
Not everyone is required to file a tax return. The requirement to file depends on a person’s income, filing status, age and whether they can be claimed as a dependent on someone else’s return. Anyone not sure whether they need to file a return should see Do I Need to File a Tax Return or refer to Publication 17, Your Federal Income Tax for Individuals, on IRS.gov.
For an estimated one million taxpayers who did not file a 2013 tax return, April 18, 2017, is the last day to file to claim their part of tax refunds totaling more than $1 billion.
Taxpayers due a refund must file a return within three years of its due date or the money becomes the property of the U.S. Treasury.
There are no late filing penalties if a refund is due.
According to the IRS, the most common reasons people do not file a return who should are: they don’t know how, may not have the documents needed or owe more tax than they can pay.
Taxpayers who owe more than they can pay should pay as much as they can by the due date in order to minimize interest and penalties.
Extensions of Time to File
Taxpayers who are not ready to file by the deadline should request an extension of time to file. An extension gives the taxpayer until Oct. 16 to file but does not extend the time to pay. Penalties and interest will be charged on all taxes not paid by the April 18 filing deadline.
There are several ways to do this. The fastest and easiest way to get an extension is through Free File on IRS.gov where some partners offer free electronic filing of the extension request. Extensions are free for everyone, regardless of income.
Taxpayers who earn $64,000 or less can return to Free File before Oct. 16 to prepare and e-file their taxes for free
IRS will automatically process an extension of time to file when taxpayers select Form 4868 and they are making a full or partial federal tax payment using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card by the April due date.
There is no need to file a separate Form 4868 extension request when making an electronic payment and indicating it is for an extension.
Taxpayers also can complete and mail in Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to get a six-month extension.
Taxpayers Who Can’t Pay
Taxpayers should file by the deadline, even if they can’t pay, or pay as much as possible and ask the IRS about payment options. By filing a tax return, even without full payment, taxpayers will avoid the failure-to-file penalty. This penalty is assessed when the required return is not filed by the due date or extended due date if an extension is requested.
The failure-to-file penalty is generally 5 percent per month and can be as much of 25 percent of the unpaid tax. The penalty for returns filed more than 60 days late can be $205 or 100 percent of the unpaid tax.
The failure-to-pay penalty, which is the penalty for any taxes not paid by the deadline, is ½ of 1 percent of the unpaid taxes per month and can be up to 25 percent of the unpaid amount. Taxpayers must also pay interest on taxes not paid by the filing deadline.
The IRS reminds taxpayers that there is no law that permits taxpayers to refuse to file a federal tax return or refuse to pay their taxes.
This includes for reasons based on programs or policies with which they disagree on moral, ethical, religious or other grounds.
Taxpayers who file a frivolous tax return can be assessed a $5,000 penalty and civil penalties of up to 75 percent of the underpaid tax.
Frivolous tax returns are those tax returns that do not include enough information to figure the correct tax or that contain information clearly showing that the tax reported is substantially incorrect.
