If the government owes you, don't expect to get that money any time soon. "Why spend a buck to get back a quarter? That's going to vary on a case-by-case basis." "It may not be worth your while," she said. In that case, weigh your time and money costs in refiling against the potential gain, said Labant. Of course, a refund is also good reason to file an amended return. Read More Nearly a third of savers have less than $1,000 for retirement "It behooves you to not wait until the IRS catches you." (Keep in mind, in most cases the IRS can audit returns filed within the last three years, or up to six if a taxpayer fails to report 25 percent of more of his income.) But if you made a simple math error, there's usually no need to amend the return, she said-the IRS's computers usually catch that quickly and generate a notice with your corrected bill. "It stops the clock on penalties," said Weltman. There's good reason to file an amendment quickly if you suspect you owe the IRS more. Taxpayers should also attach any documents supporting the change (i.e., that missing charitable donation receipt or corrected 1099). There's a section to explain why you're amending the return. The three-column Form 1040X has taxpayers copy line items from their original return, noting which should be corrected and the net change. "It's a relatively simple process to file an amended return if you have the corrected information," said Labant. Worthless securities and bad debts also merit an amendment, she said-in which case, taxpayers have up to seven years to go back and claim the loss. Or maybe you realize you forgot to claim a valuable deduction. Sometimes it's as simple as a 1099, K-1 or other tax form that arrives or is corrected after you've already filed, said Barbara Weltman, a tax and business attorney based in Vero Beach, Florida. Reasons why a taxpayer might amend an income tax return filed this year, or even in previous years, vary widely. "We have an amended return for the same reason pencils have erasers," said Smith. By April 17, according to its latest report, the agency had received nearly 132.3 million individual returns, 0.8 percent more than last year. "It's not unusual for there to be 3 to 4 percent of returns, sometimes a little more, amended in a given year," he said. Read More Have you done this with your 401(k)?Īlthough the IRS has not yet released estimates for this year, spokesman Eric Smith said it's likely to be a figure similar to last year's. Last April, the IRS said it expected that almost 5 million taxpayers-about 4 percent of the 131.2 million returns received-would file an amended return. "It's not extremely common, but it's certainly not rare, either," said Melissa Labant, director of tax advocacy for the American Institute of Certified Public Accountants.
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