Amending tax returns for
‘marginally employed’ taxpayers

April 18, 2010

How in the heck did I miss this tax form? It certainly would have helped in my personal filing, since it's designed for me and my fellow "marginally employed" freelancers.

NYT_SkedBFaS_1040Scrimp_excerpt1

I might just have to amend my tax return and take advantage of Schedule BFaS, which was created by graphic designer Sam Potts for the New York Times and which you can see in its entirety here. Do check it out. The "deductions," such as for Twitter, the rent you pay a friend so can live in his or her closet and for the cost of indispensable pajamas you wear as you work from home, are a hoot.

It is, of course a fictional tax form. Given the complexity of the tax code and the veneer of truth given some things that appear online, I had to point that out.

Filing real 1040 mistakes: However, amending tax returns is a completely legitimate, and often warranted, move.

If you've found a mistake on your tax return, it's a relatively simple process to make sure you get the right information to the IRS. You just need to file Form 1040X.

In fact, amending returns is so common — not surprising given the tax laws and the plethora of annual changes — that the IRS has created a special Top 10 Facts about the process:

  1. If you need to amend your tax return, use Form 1040X, Amended U.S. Individual Income Tax Return.  
  2. Use Form 1040X to correct previously filed Forms 1040, 1040A or 1040EZ. The 1040X can also be used to correct a return filed electronically. However, you can only paper file an amended return.  
  3. You should file an amended return if you discover any of the following items were reported incorrectly: filing status, dependents, total income, deductions or credits. 
  4. Generally, you do not need to file an amended return for math errors. The IRS will automatically make the correction. 
  5. You usually do not need to file an amended return because you forgot to include tax forms such as W-2s or schedules. The IRS normally will send a request asking for those documents. 
  6. Be sure to enter the year of the return you are amending at the top of Form 1040X. Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later. 
  7. If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the IRS campus for the area in which you live. The 1040X instructions list the addresses for the campuses. 
  8. If the changes involve another schedule or form, you must attach it to the 1040X. 
  9. If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.  
  10. If you owe additional tax for 2009, you should file Form 1040X and pay the tax as soon as possible to limit interest and penalty charges. Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.

I want to emphasize numbers 4, 5, 9 and 10.

Don't bog down the return process by submitting info, like math miscalculations or missing statements, that the IRS will catch anyway. Just be on the lookout for the IRS notice requesting the missing forms.

Int the case of addition and subtraction issues, just note the correct amount on your copy of your 1040 and then when your refund arrives, make sure that the corrected math was taken care of by the IRS.

As for more money from Uncle Sam, as tip number 9 notes, let your original filing and refund work through the system. Then file the 1040X to get the additional tax cash.

But, as number 10 points out, if you owe, get it in as soon as you discover it so that you can stop associated penalty and interest charges.

And sorry. No e-filing of Form 1040X yet. But the IRS promises that making this happen is on its short list.

In addition to the official IRS word on filing a 1040X, check out the tips from these folks:

Here's hoping that you got everything perfect on your 1040. But just in case, don't be afraid to make thing right, even if it costs you a little more in taxes.

It's always better that you find and fix your tax mistakes before the tax man does.  

Hat tip to @debng and @Mediabistro

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