We stumbled upon a report the other day that about 2.2 million taxpayers over-pay the IRS each year. This makes us a little nauseous! And the people who usually over-pay are the folks who went the DIY tax filing route.
If you didn’t use a full service tax and accounting firm to prepare your taxes last year, there’s still time to correct it and reclaim your over-paid cash. Here at Adachi Financial Services, we are up-to-date with all the latest tax laws and we can help you take advantage of the deductions and credits that are applicable to your specific tax situation, and maximize your tax savings in the process.
We can review and amend your prior year’s tax returns, even if someone prepared them besides us. We often find missed deductions and/or mistakes made by online tax software or other preparers.
There are various reasons why you may have to amend your tax returns:
- Report your correct filing status
- Report additional income
- Report additional withholding
- Remove dependents you claimed
- Claim additional dependents
- Claim tax credits you generally missed
- Make changes to your deductions
Amending your return is significantly less difficult than it used to be. After changing your original return to incorporate the new data, the newly amended return will essentially become your new tax return. The IRS says you must file Form 1040X by paper, not electronically.
Firstly, you have to retrieve the return you are amending, then open a blank form 1040X with any supporting forms, timetables or worksheets. It’s additionally a smart thought to have the guidelines for the return you are correcting since exemption and deduction amounts change from year to year.
Form 1040X has three columns: Column A shows amounts from the original return. Column B shows the net increase or decrease for the amounts you are changing. Column C shows the corrected amounts. You should explain what you are changing and the reasons why on the back of the form. Be particular here, however, be brief as you state what you are adding (“I am reporting extra wages and withholding from a W-2”), why you are detailing it now (“since I forgot to incorporate it into my original return”), and what changes happened subsequently (“which brought about changes to my AGI, taxable wage, refund, etc”).
You will then complete the rest of the form with the correct amounts you are reporting. This includes pay, reasons, charge risk, installments, and refund or
amount you owe. On page two of the form, you will report your exemptions just in case you’re rolling out improvements.
You should document a different 1040X for each return you are amending. The IRS by at least takes five to eight weeks to process amended tax returns.