Ah, April 15 has come and gone. Aren’t you glad another Tax Season is over? Ah, yes — another tax return filed, another tax return “in the books.”
Well, I’ve got a pleasant surprise for you.
Did you know you can actually get a refund for a return that you already filed?
Yep, it’s true.
If you think you forgot a deduction on a previously filed return, you have three years to tell the IRS about it and receive a refund.
Here’s how it works: You can file an amended return up to three years after the due date of the return in question.
So, for Year 2010 returns originally due April 15, 2011 — you have until April 15, 2014 to file a correction.
For Year 2009 returns originally due April 15, 2010 — you have until April 15, 2013 to file a correction.
And for Year 2008 returns originally due April 15, 2009 — you have until April 15, 2012 to file a correction.
Now the question becomes: Is it worth it? I mean, do you really want to spend the time and energy doing tax paperwork — and it’s not even Tax Season!
I know, I know — you’ve got better things to do with your time.
So here’s an incentive to make it worth your time: If I offered you a little part-time job that paid about $180 per hour, would you be interested? I think so.
Well, that’s how you should look at the task of filing an amended tax return. Do the math:
You discover $1,200 of unreported deductions on your return from Year 2008, 2009 or 2010. So you do the research, prepare the proper forms (or have your accountant do it), and send them off to the IRS.
If you are in the 30% tax bracket (say, 25% federal plus 5% state), you will get a $360 refund for your efforts. And even if it took you 2.0 hours of paperwork drudgery, Uncle Sam just paid you a cool $180/hour. Not bad, eh? Even if it takes 3 hours, that’s $120/hour.
To file an amended federal income tax return, here are the links to the necessary forms:
Form 1040X — in pdf format:
http://www.irs.gov/pub/irs-pdf/f1040x.pdf
IRS instructions for Form 1040X:
http://www.irs.gov/pub/irs-pdf/i1040x.pdf
You should also file an amended state return (assuming your state has an income tax). For a link to a database of all state income tax forms, check out: http://www.taxsites.com/State-Links.html
Don’t forget: if you’re able to find $1,200 worth of unreported deductions on one previously filed return (resulting in tax savings of $360), there’s a good chance the same situation exists for the other 2 “open” years.
End result: $360 x 3 = $1,080 in total tax savings . . . Not too shabby!
Need help doing an amended return? Give me a call at 260-459-3858 and I’d be glad to discuss your situation and provide assistance.