What are the Reasons to Amend a Tax Return?

Nashua, NH Resident Asks for Advice

Amending a tax return in your favor can give you money back that you had not been entitled to before these changes.  Amendments such as claiming overlooked deductions, IRS rule changes, miscalculations and a corrected 1099 or W2 can all work in your favor, giving you a larger return.  You will want to make changes to past tax returns if there are errors that may be flagged by the IRS, including unreported income.

A Nashua resident recently discovered that his previous tax documents had overlooked deductions that would have given him a sizable amount of money back.  Wondering if anything could be done now, he contacted Merrimack Tax Associates

Overlooked Deductions Make Amendments Worth It

It isn’t uncommon to miss tax deductions from the previous year, from charitable contributions to business expenses.  In some instances, this can leave a large amount of money that you are entitled to in the hands of the IRS.  It isn’t uncommon for taxpayers to file amendments, particularly if paperwork such as a 1099 or W2 is received after the filing deadline. 

It is recommended by the IRS that any amendments to your tax return be filed within three years.  Beyond this time, any changes may not be accepted and you will not be eligible for additional refunds.  Amended tax returns cannot be e-filed but need to be mailed in using form 1040X and any supporting documents.  If amending multiple years, you will need to file a separate form for each tax year.

Amendments Can Put You at Higher Risk for an Audit as the Three-Year Window Reopens

Many taxpayers are wary to make changes to past tax documents as they are concerned that it may increase the likelihood of an IRS audit.  While filing an amendment does not necessarily put a target on your back, it does reopen the three-year window that the IRS has to audit your taxes.  Not providing supporting documents or inflated numbers can increase your likelihood for an audit.

The Nashua resident met with Merrimack Tax Associates, ultimately filing an amendment.  He can expect some money back from the IRS for these overlooked deductions.

Call today (603) 429-2009 to set up an appointment with Merrimack Tax Associates’ professionals to learn more about amending your tax return.