When And When Not To File An Amended Tax Return.

Did your client just find out that they missed out something in their tax return? No worries. IRS has a solution for that. IRS provides you a chance to file an amended tax return to cover up things you have missed. Although there are certain limitations, tips, and tricks you have to keep in mind. You should use Form 1040X, Amended U.S. Individual Income Tax Return, to amend your client’s filed Form 1040, 1040A or 1040EZ. Remember to select the year of the return you're amending on the 1040X. Also, this can be submitted through mail only, there is no option for e-filing in case of an amended tax return. Although it is suggested to file an amended tax return if you missed something or made a mistake in your tax return, it is not mandatory. Here is the list of situations when and when not to file an amended tax return.

When to file:

1: You should consider filing an amended tax return if there is a change in filing status, income, deductions or credits.

2: It is lesser than three years from the date you filed your client’s original tax return or two years of the date the tax was paid, whichever is later. Be sure to enter the year of the return you are amending at the top of Form 1040X.

3: If you are filing an amended tax return to claim an additional refund, you should wait until your client has received the original tax refund before filing Form 1040X. Amended returns take up to 12 weeks to process. Original refund can be encashed while waiting for for the additional refund.

4: If your client owes additional taxes, file it and pay the tax as soon as possible to minimize interest and penalties.

When not to file:

1: Generally it is not needed to file an amended return to correct math errors. The IRS will automatically make those changes.

2: Also, there is no need to file an amended return because your client forgot to attach tax forms, such as W-2s or schedules. The IRS normally will send a request asking for those if they are needed.

3: Certain things can’t be changed in the original tax return by an amended tax return. For example, after crossing the due date for the original return you cannot change from married filing joint to married filing separate.

Source: https://www.forbes.com/sites/robertwood/2012/04/20/5-simple-rules-to-follow-when-amending-your-tax-return/#502610154892