FILING AMENDED TAX RETURN

The number one justification to file an amended return is to lower the tax liability.  The second is to correct an error on the originally filed return.  We need to make sure that all returns have been filed or amended before beginning the settlement process.  The most common reasons for filing an amended tax return include:

• To change filing status
• To include income not reported
• To take additional deductions on 1040
• To take additional business expenses on Schedule C
• Take advantage of tax credits
• Add or remove dependents
• To change from taking the standard  deduction to itemizing on Schedule A
• To correct “cheating” errors BEFORE receiving notice of a tax audit.

If you manually prepared your return and there were computation or math errors, the IRS computers will correct these mistakes.  However, it may take the IRS longer to make these corrections than filing an amended return.  If the amended return results in additional tax liability, filing the amended return rather than wait for the IRS to make the corrections will reduce IRS penalties and interest.