CU Community Home
Chapters
SAS Credit Unions
Small Credit Union Resources
Scholarship Program
Mentor Program
League SAS Services
SAS Gazette Newsletter
SAS List Serve Sign up
Committees & Task Forces
Resources
Michigan Credit Unions
MCUL/MCUF Awards
Maxwell, Herring, Desjardins Awards
Michigan Credit Union Foundation
MCUL AED Program
Michigan Credit Union League Home » CU Community » SAS Credit Unions » Marketing » Newsletter Help » Tax Tips  

Additional Newsletter Topics
The Mistake's In The Mail
Lori Z. Bahnmueller
Michigan Credit Union League-YOUR MONEY MATTERS

When my husband and I dropped our completed 1999 tax return in the mail last past April, we both breathed easier knowing we were free of this burden, at least for a short while. Upon review of a copy of our forms, however, we noticed our tax advisor had overlooked a $1500 Hope Scholarship credit. After a short phone conversation, we were again breathing easy because our advisor told us correcting the oversight required only a simple amendment.

According to the Michigan Association of Certified Public Accountants, given the complexity of today’s tax laws and the average taxpayer’s tendency to procrastinate, it should come as no surprise that a number of tax returns are sent to the Internal Revenue Service (IRS) with incorrect or missing information. Thankfully, the simple remedy requires that you file Form 1040X, Amended U.S. Individual Tax Return.

Walter Moore, CPA with Laine Appold & Co. of Bay City, said this form is quite common within the ranks of the IRS and also easy for filers to follow and understand.

“The form itself is not imposing,” he said. “If filers are used to completing their own returns, this amendment should pose no problem.”

He added there’s no need for filers to redo their returns if they use the 1040X.

Amending your return
Corrections on your income tax return may be necessary for a number of legitimate reasons. You could have claimed deductions you shouldn’t have claimed, or on the contrary, you failed to take deductions to which you were entitled.

Oversights are not always the fault of the filer as tax laws may change and the IRS permits you to benefit from such a retroactive change by adjusting your original return.

If simple miscalculations necessitate your tax amendment, the IRS will automatically make corrections on your behalf. If you do discover errors after you file, it’s best to volunteer the information and to rectify the mistake yourself to avoid possible IRS penalties.

Moore said you’re far better off to send an amendment, paying the extra money plus interest if necessary, than waiting for the IRS to find it.

Completing Form 1040X
Form 1040X is a single sheet, front and back. The front requires you to list changes in your income, credits or deductions and allows you to calculate any net increases or decreases in your taxes. The reverse side permits you to provide a written explanation for your changes and the reasons for each. You’re encouraged to write clearly and concisely but you may attach additional pages.

Before mailing it, make sure to include pertinent information like the year of the original return and, if the original return was filed jointly, verify that both spouses have signed the amendment. Also attach any supporting documentation like forms or schedules that confirm your changes. For example, if you’re correcting the amount of wages you received or the tax withheld, affix a copy of your corrected W-2 Form.

Settling Your Tax Bill
If your filed amendment yields a refund, the IRS gives you two options to receive the overpayment. The first is the traditional check refund that will be sent to you within a reasonable amount of time after the amendment is processed, but it will be sent separately from any refund that may come from your original return. The second is in the form of a credit which can be applied to next year’s return.

Taxpayers who owe must pay the full amount with Form 1040X, even if the original return showed an overpayment as the IRS won’t deduct what you owe from your refund check. You must pay the amount due and you will receive the original refund check separately. Send your amended return to the IRS service center for the area where you live — to the same address you sent your original return. The addresses can be found in the FORM 1040X instructions.

The statute of limitations, the period during which the IRS allows you to make corrections and changes, is generally three years after the original return was filed or two years from the date the tax was paid, whichever is later. If you do not file your amended claim within this time frame, you may lose your opportunity to receive a credit or refund.

 
   
MCUL Home About Us Press Room For Consumers Home Contact Us Site Map