2013-03-13 21:57:51 -
Thomson Reuters analyst explains considerations and steps for filing an amended
NEW YORK, March 13, 2013- "Most U.S. individual taxpayers eventually make a
mistake or two on their federal income tax return or have another need to adjust
a prior year's return," says Jim Van Grevenhof, a senior tax analyst at Thomson
Reuters. That is why the IRS created Form 1040X (Amended U.S. Individual Tax
Return). "Keep in mind that changes submitted can increase as well as decrease
your tax bill," cautions Van Grevenhof.
Form 1040X can be used to correct previously filed Forms
1040, 1040A, 1040EZ, 1040NR, or 1040NR-EZ. It can also be used to make certain
elections after the deadline, change amounts previously adjusted by the IRS, or
make a claim for a carryback due to a loss
or unused credit, notes van
Form 1040X contains three columns in which the taxpayer indicates the original
submission amount, the net change to the original submission amount, and,
finally, the correct amount. In addition, the taxpayer must include information
explaining the change or changes.
To complete Form 1040X, the taxpayer should start by making any required changes
to the adjusted gross income (AGI) which is the total of income minus certain
deductions (adjustments). (It is the amount that appears on the last line of
page 1 on Forms 1040 and 1040A.) Examples include the addition of alimony
payments, business income, or capital gains the taxpayer forgot to include in
income or business expenses, moving expenses, self-employment taxes, or student
loan interest the taxpayer forgot to deduct on the original return. Van
Grevenhof advises to keep in mind that a change to AGI can cause other amounts
to increase or decrease including miscellaneous itemized deductions, education
credits, allowable charitable contributions, and the taxable amount of social
Next, the taxpayer should report any changes impacting itemized deductions or
standard deduction. Examples include incorrect reported amounts of and/or
failure to include interest on a home loan, real estate or state income taxes,
and charitable contributions.
Finally, the taxpayer should make any changes to the number of the exemptions
claimed to determine taxable income. Then compute the tax liability and subtract
any credits and payments to determine the amount of tax owed or refund due.
A taxpayer should only file Form 1040X after filing the original return, notes
Van Grevenhof. Generally, for a credit or refund, taxpayers must file Form
1040X within three years (including extensions) after the date they filed their
original return or within two years after the date they paid the tax, whichever
Taxpayers should consult with a personal tax adviser before applying these or
other tax strategies.
Up-to-date analyses of legislation and regulations affecting individual
taxpayers are available for tax and accounting professionals on the industry-
leading, award-winning Thomson Reuters Checkpoint research platform.
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