A Second Chance at Tax Breaks

published 23 June 2011

After we filed our 2010 tax return, we realized that we missed claiming the American Opportunity Credit for paying our son’s college tuition last year. Our joint income is less than $160,000, so we qualify. Is it too late to claim the tax credit?

No, it’s not too late to claim the credit, which can knock $2,500 off your income tax bill. Generally, you have up to three years after the date you filed your original federal tax return to amend it, but the sooner you file, the sooner you’ll get a refund. You can file an amended return for any deduction or credit you discover you’ve missed during that time period.

Download Form 1040X from IRS.gov, enter the year of the return you are amending, fill in the new numbers, and attach any tax forms that are affected by the change.

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Reducing your federal tax bill could also lower your state income tax bill. File your amended federal return first, get a copy of the transcript of your account from the IRS (confirming you amended your federal return), and then file an amended return with your state, along with a copy of your federal Form 1040X.

For more ideas about tax breaks you may have missed in 2010, see The Most Overlooked Tax Deductions.

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.