When You Need to Amend
I just love IRS publications don’t you? These novellas, such as Publication 17 – Tax Filing Information (link in reference section), are lengthy and they can be confusing. My favorites are those IRS directions that say you should consider correct tax mistakes if this happens in conjunction with this mistake or a combination of requirements you must meet—and even worse, those conditional terms: If you answer yes to one or three, but not two of the following questions, then you must (blah blah blah):
- Live on a boat and have a jet ski and made at least $10,000,
- You live on a boat, have a jet ski and a girlfriend and a wife and made under $10,000, or,
- You live on a boat your Mommy owns but still own the jet ski and have a wife and girlfriend and made under $10,000!
How does the average taxpayer figure out all the what-ifs? If you combine this answer with that answer, you’ll find the right answer—these IRS scenarios can send the mind racing!
There are, however, times when correcting tax mistakes is a necessity so skip the IRS Novella Publication 17 and find out when you should amend your return.
Filing Status – If you need to change your filing status (married, single, etc.), you will need to amend the return.
Underreported Income – If you forgot (sure you did) to include a few 1099 wage earning reports and underreported your income, you must amend because don’t forget—the IRS has a copy of those 1099s! They also receive copies of every W-2 Wage report annually so don’t try and fool the IRS, they’ll catch on. Yep—underreporting often means IRS audits or interest and penalties so do amend these mistakes.
Imaginary Deductions – Well not imaginary, but perhaps you simply forgot (again, sure) and included deductions or expenses you should not have claimed. Sure these can increase your refund but this is dishonest so either don’t do it or amend the return ASAP.