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Retirement Daily's Robert Powell caught up with Jeffrey Levine, CPA and tax pro from Buckingham Strategic Wealth Partners, to discuss tax tips for filing an amended tax return.
Watch the video above, or read the transcript below.
Robert Powell: What options do you have to correct and amend your tax return? Well, here to talk taxes with us is Jeffrey Levine from Buckingham Wealth Partners. Jeffrey, what do folks need to know about correcting and amending their tax return?
Jeffrey Levine: Well, I think at first, let's say you have to do it, or at least you're going to want to do it. Because one of two things is true. Either you are amending your return to show an increase in your tax liability, in which case you have to do that. Right, the government wants its taxes. Or you're going to be getting a refund, in which case you probably want to make sure you're doing that because you want those dollars back. Now, there are some less common situations where you need to amend your return without actually changing your tax liability just because you've misreported some information that ultimately doesn't impact the tax liability. But those are fewer and far between.
When you need to change your return prior to the original due date, you can file what's called a superseding return, which is actually not an amended return. It basically treats that superseded return as though it was your first return filed from the onset. Once you've passed that date though, then you would need to file an amended return. Generally, that would be a 1040-X for individual filers, married couples, single individuals, widowers, etc. And filing that (tax) return simply kind of starts with your initial return and then says, here's what we change. Ultimately, if you get a refund, you'll be entitled to that refund. If you owe tax, you will owe that tax plus whatever interest is due because you didn't pay that tax bill on time. Better to do it sooner rather than later though. So if you need to file an amended tax return, get on that and do it as quickly as possible.
Robert Powell: Right, and can you only correct the most recent tax return, or can you go back in history and change other returns?
Jeffrey Levine: Yeah, so if you missed some years, let's say, and you filed way late, you could go back and amend those tax returns as well for at least a limited period of time. But generally, we're looking at a three-year statute of limitations on going back and amending your tax returns. (See 1040-X Instructions page 2 – When to file)
Editor's Note: The content was reviewed for tax accuracy by a TurboTax CPA expert.
TheStreet's Zach Faulds contributed to the writing of this article and produced the video and/or the graphics associated with it.