The Tax Blotter – May 29, 2023

The Tax Blotter is a round-up of recent tax news.

Is it too late to fix the 2022 tax return you just filed in April? No! You can correct errors by filing Form 1040-X.

To amend your return or not? That is the question. Suppose you find you failed to claim a deduction or omitted some vital information. The answer often depends on the extent of the change required and its nature. If the error was made in your favor, the conventional wisdom is that you should file an amended return immediately to square things up with IRs. But a minor revision that will benefit you only slightly might not be worth the hassle. 

Move in time. How long do you have to file an amended return? Generally, you can take until three years from the date the initial return was filed or the due date of the return if that was later. So, if you want to file an amend return for the 201 tax year, the deadline is essentially April 15, 2024. This is the same length of the time the IRS as to audit your return if fraud isn’t involved. If you expect to owe additional tax, the sooner you file the better to limit penalties and interest.

Use e-filing option. Previously, you could not file an amended return electronically, but this option is available for 2020 returns and subsequent years. However, you must submit an amended return via snail mail if the original return was filed on paper. Also, you can now request direct deposit of refunds if you’re amending a return for the 2021 or 2022 tax years. Caveat: Direct deposit isn’t allowed for amended returns filed on paper. Check “Where’s My Amended Return” on the IRS website for the status of a 1040-X.