All Things Taxes

Forget something on your tax return?

So you filed your tax return on time, but after doing so, you realized you may have forgotten to include something very important. Now what do you do?

That’s simple. All you have to do is file an amended tax return using Form 1040X, Amended U.S. Individual Income Tax Return. This form can be used to correct Forms 1040, 1040A or 1040EZ, and can also be used to correct a return you filed electronically.

The next question is, do you really need to file an amended return? In other words, did you make a simple mathematical error or did you mistakenly report something incorrectly?

Here are some guidelines to go by.

You need to file an amended return if:

• You incorrectly reported your filing status, dependents, total income, deductions, or credits.

You do not need to file an amended return if:

• You made a math error. The IRS will generally make that correction for you.
• You forgot to include forms such as W-2s or schedules. The IRS will normally request those from you.

Quick tips for completing and filing an amended tax return

• In general, you must file the amended return within three years from the date you filed the original return or within two years from the date you paid the tax, whichever is later.
• Enter the year of the tax return you are amending at the top of Form 1040X.
• Prepare a separate Form 1040X for each tax return you are amending and mail them in separate envelopes. You can find the address for the IRS processing center in your area in the Form 1040X instructions.
• If the changes involve another schedule or form, attach those to the 1040X.
• If you are filing for an additional refund, you should wait until you have received the original refund before filing the 1040X. You can go ahead and cash the original refund check because the IRS will simply send you an additional check.
• If you owe additional tax for tax year 2008, file Form 1040X and pay the tax as soon as you possibly can. By doing this, you will limit the amount of interest and penalties that may accrue because interest is charged on any tax not paid by the due date of the original return, even if you filed an extension.
• The normal processing time for amended returns is approximately eight to 12 weeks from the date the IRS receives the form.

For more information on amending tax returns, visit www.irs.gov.

Keeping good records will help you remember all the transactions you made throughout the year.  Good record keeping also saves time for you or your tax preparer. Generally, tax records should be kept for three years, but important documents – such as those related to the purchase of a home or stock transactions- should be kept longer.

You should keep any record you might need to file your federal tax return.  These can include:

• Bills
• Credit card or other receipts
• Invoices
• Mileage logs
• Canceled, imaged or substitute checks or other proof of payment
• Any other type of record to support deductions or credits being claimed on your tax return

Following these suggestions year-round will help reduce the amount of stress tax filing season can bring.

Depending on the time and distance tests, you may be able to deduct certain moving expenses. The distance test says that your new job must be at least 50 miles further from your new home than your old home was from your old workplace.  For example, if your old home was 5 miles from your old workplace, then your new job must be at least 55 miles away from your previous residence.
The time test requires that you work at your new workplace at least 39 weeks during the first 12 months after your move.  If you are self-employed, you must work full time in the area of your new workplace for at least 39 weeks during the first 12 months and a total of 78 weeks during the 24 months after you move to ensure you meet the IRS’ time test guidelines.

If you meet the distance and time tests, you are eligible to deduct reasonable moving expenses, according to the IRS.  Reasonable moving expenses include the cost of moving your household goods, the cost of moving your car (18 cents a mile, parking and any tolls you incur), lodging, and the expense of storing your goods for 30 consecutive days, if necessary.  Taxpayers cannot claim any expenses that are reimbursements excluded from your income.

There are several exceptions to the time test that taxpayers should be aware of:

• Your job ends due to disability
• You are transferred for your employer’s benefit
• You are laid off or discharged for a reason other than willful misconduct
• You are in the Armed Forces
• You are filing taxes for a decedent

Members of the Armed Forces are exempt from the time and distance tests if the move is due to a permanent change of station. Military members cannot claim any of the expenses that are covered for them by the government.

Following these guidelines should help you accurately report any deductions you may receive due to a move.  Consult a professional tax preparer if you need assistance.

One of the most important tips to remember is to gather your records, such as W-2s, 1099s, mortgage interest, broker statements and K-1s, in advance and keep them all together.  Make copies of these statements for your records.
Here are some other helpful tips to get a jump on tax season.

• Make sure you have the right forms. All necessary forms are available on www.irs.gov.
• Take your time when filling out your forms. Rushing through them could mean making mistakes.
• Double-check your math and Social Security Numbers. These are two of the most common errors found on returns. Checking and rechecking your math can reduce the chance of errors and speed up your refund.
• Get a fast refund. File early and you will receive your refund quicker. It will also come quicker if you choose direct deposit because that eliminates the time spent waiting for a check in the mail.
• Use E-file to file your tax returns. E-filing can catch math problems and provides you with confirmation that your return has been received. It also gives you a faster refund.
• Don’t panic and don’t rush. If you have a problem or question, www.irs.gov is available 24 hours a day.

Don’t procrastinate! If you start preparing now, you can avoid the tax season rush and if you are expecting a return, get it that much faster.  If you don’t like preparing your returns, you can always hire a tax professional to complete and file them for you.