NYC tax planning and filing can be overwhelming. Under the pile of income files, accounts, receipts, and expenses, it is natural to make errors or miss out on any income to report. The good thing is that the IRS allows you to correct those mistakes by filing an amended tax return. Moreover, if the amendment increases your tax return, it would be an added benefit for you. So if you need to make corrections, stay tuned to learn about tax amendments.
When to Amend Taxes
There are specific criteria that allow you to make tax amendments. So here are five reasons for you to amend taxes.
- Change in Your Filing Status: Your filing status is critical as it determines your eligibility for the standard deduction and tax rates. Hence, if you have changed from single to married filing status, then make sure to update it if you missed it during reporting taxes.
- Skipped to report an eligible income: As an earning person, your income may come from several sources, such as a job, a project-based work, a tip, a self-employed project, etc. So if you miss out on adding any income that is eligible for tax filing, you must consider an amendment. Better yet, ask for help from a personal tax accountant in NYC to assist you in filing the necessary forms.
- Change in the status of dependents: The status of your dependents, the number of your children, can hugely affect your taxes. If your dependents are under the age of 18, you can claim them as dependents for the child tax credit. However, if your child ages over 19 years, the status of your dependent changes which you have to report during your taxes.
- Error in Filing Taxes: As we report a huge amount of data, we tend to make wrong inputs. Such as errors in calculated numbers, bank account numbers, misspelled names, etc. In that case, you must apply for a tax amendment.
- Sick Leave/Family Leave: There are particular sick leave, such as sick leave, family leave, or COVID-19-related leave. These credits may account for certain deductions you need to be aware of. In that case, you must report your leave to file for the credit.
Preparing your Amended Tax Return
The tax amendment process is quite simple. Here’s all you need to know about the filing process.
- Collect documents: There are certain documents you need to file a tax return. Make sure to collect all the necessary documents. You will need a W-2 or 1099 Form to correct your reported income. You will require Form 1098 Mortgage Interest Statement to support the new deduction and Form 1098-T to claim an education credit.
- Prepare Form 1040-X: There are three columns in Form 1040-X. Use column A to report on your tax return. Column B will show if the amounts from your original return need to increase or decrease. Finally, use Column C to list the corrected number of the error amount.
- Submit the Amended Form: As soon as you complete the form, e-file the amended tax returns.
Time Limitations
Keep in mind that there is a stipulated time limit for tax amendment three years from the return’s original due date. If you want to spare yourself from the burden of deadlines and focus on your business instead, get in touch with a business tax accountant in NYC.
Suppose you are filing a tax return for the 2021 tax year. If you file the tax on February 18, 2022, you have until April 18, 2025, to amend your tax return.
If you qualify for tax amendment, follow the above information and detail. Besides, Ahad&Co., a firm also offering business consulting in NYC, is at your service to help you remotely e-file your tax amendments.
