What If I Need to Amend a Tax Return?

You completed your tax return and submitted it on time. But while you thought tax time was behind you, suddenly you realize that you made a mistake on your return. What can you do? Don’t panic: There is a process for amending your return if you discover you made an error or left something out.

The California Society of CPAs (CalCPA.org) offers practical advice on when it’s best to amend a return and what’s involved. 

When Should I Amend?

You should amend your return if you need to make changes to your reported income, filing status, deductions, or credits. Let’s say you did some part-time work on the weekends last summer and forgot to include that income on your 2016 return. Or maybe you just realized that you’re eligible for the American Opportunity tax credit based on college courses you took last year. These are some examples of reasons you may need to send in an amended return.

How Does the Process Work?

You can generally amend a return up to three years from the date the original return was filed (or up to two years after the tax was paid, whichever is later). If you were due a refund from your original return and realize you deserve an additional refund, wait until you get the original refund before you file your amended return. Amended returns take up to 16 weeks to process.

If you owe more tax, file your amended return and pay the tax as soon as you can to avoid possible interest or penalties you may be charged for late payment. And don’t forget to amend your state tax returns, as well, if the same changes apply to them.

When Isn’t It Necessary?

Not all mistakes require an amended return. If you made a math error, the Internal Revenue Service will automatically correct those errors for you. If you failed to attach necessary tax forms, the IRS will generally mail you a request for them.

Will the IRS Call Me About a Problem?

There are many criminals who try to scam people by pretending to represent the IRS and demanding money. The IRS does not initiate contact with taxpayers by email, text, or social media to ask for personal or financial information.

Don’t click on attachments or links in emails claiming to be from the IRS or provide confidential information on websites associated with them. In addition, the IRS usually initiates contact with taxpayers by mail, not by phone, and says it would never call to threaten things such as arrest, deportation or license revocation when attempting to collect taxes.

Call the IRS at (800) 829-1040 or contact your local CPA if you have any questions about an IRS communication that you receive.

A Special Option for Some Veterans

A new law offers veterans with combat-related injuries the chance to file amended returns to reclaim taxes that were improperly withheld. Veterans who leave the armed services with personal injuries or sickness resulting from active service in the armed forces receive severance payments that are not supposed to be included in their gross taxable income, but taxes on some payments were incorrectly withheld in the past.

Thanks to the Combat-Injured Veterans Tax Fairness Act of 2016, veterans can file amended returns for improper withholding going back to 1991. Affected veterans will be notified of their eligibility by Dec. 20, 2017, and will have one year after their notification to file their amended returns.

Contact Your Local CPA

If you believe you need to amend your return, or if you have questions about any tax-related issues, turn to your local CPA for help. He or she can offer personalized advice on all your financial concerns. For additional, tax-related information, visit 360finlit.org.

Copyright 2017 American Institute of Certified Public Accountants.

The Money Management columns are a joint effort of the AICPA and the California Society of CPAs as part of the profession’s nationwide 360 Degrees of Financial Literacy program.