Tax Return Do-Overs
By Mary Beth Franklin, from the July issue of Kiplinger's Personal Finance magazineIf you dread preparing your tax return every year, the thought of doing it again may be downright awful.
By Mary Beth Franklin, from the July issue of Kiplinger's Personal Finance magazine
If you dread preparing your tax return every year, the thought of doing it again may be downright awful. But if you find a mistake or your circumstances have changes, filing an amended return could put extra money in your pocket.
Say you were preparing your 2008 federal tax return earlier this year and discovered that you failed to claim a key deduction or credit for 2007. Or maybe you chose to deduct your state income tax and later realized that because you bought a new car last year, claiming state sales tax would have resulted in a bigger deduction. Or perhaps you bought a house this year and qualify for the $8,000 first-time home buyer credit (a special rule allows you to claim the tax credit on your 2008 return).
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Generally, you have three years from the date of your original return or two years from the date you paid the tax, whichever is later, to claim a refund. To file an amended return, you must fill out Form 1040X, which you can download at www.irs.gov. Enter the corrected numbers and explain why you need to amend your original tax form. You don't have to redo your entire return; just make the necessary changes and adjust your tax liability accordingly. You may also need to file an amended return with your state tax agency.
Unlike your regular income-tax return, you can't file a Form 1040X electronically. You'll have to print it out and mail it to the IRS. Figure it will take about 12 weeks to process your request. And you can't ask for direct deposit, either. The IRS will mail your refund check to you.
Be sure to check out our Tax Center for moves you can make during the year to lower your tax bill next spring.
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