Video 14 - Myths About Filing an Amended Tax Return - YouTube

It's time to get down to The Brass Tacks. My name is Mel Sams and I'm the

managing associate of Sams CPA in Dunedin, Florida.

Today we're going to talk about the myths of amended tax returns.

now this is a subject that consistently year-over-year gives clients a lot of anxiety,

a lot of heartburn, but I'm here to tell you today some of the truths and some of the myths about

filing amended tax returns so that will hopefully help you come to a more informed decision if

you need to go that route for any particular reason.

So, first let me talk about a few of the myths. When people come in and I sit

with them and I review and we always review their prior year's tax returns

you know a lot of times we will come back with recommendations or maybe

different ways of reporting things and then their previous tax preparer did

something different and in a lot of times that results in me saying we

should consider filing an amended tax return. And then a lot of people have

anxiety over that and they say, "Oh no. I wouldn't want to do that because it puts

you at a greater risk of audit. It's a red flag." Well, I'm here to tell you that

filing an amended tax return is neither a red flag nor does it put you at a

greater risk of audit. In 2016 there were over 5 million amended tax returns filed

in the United States. 5 million, so as you can see it's a very common tool.

Things happen. Things get left off. We find additional information after the

fact. We might hurry to file and forget something or we may decide that

there was a more advantageous way to report something. Or, again, another CPA

comes in and gives a different opinion such as what I was just describing.

So, the myth of amended returns creating a red flag or putting you at all at risk

is simply not true. Now, another myth that I hear about

amended returns is that I've had people say, "Well they didn't know. Well you can't

go back and fix things." They didn't know that you could so you certainly can

as I was just saying it's it's a very commonplace occurrence for people to

need to refile their return. So, now let's talk a little bit about the the when and

the why and the how. The easiest one on that is the when. So, when you file

your income tax return, let's use 2018 as an example. That tax return, this is for

individuals, now businesses can also file an amended tax returns, but I'm gonna

talk about individuals initially. Individuals - your return is due April

15th each year, so your 2018 return will be filed on April 15, 2019. The code

says that you have three years from that due date of April 15, 2019 to file an

amended return if additional information becomes available or if you receive an

additional form or something of that effect. Now that three year window also

includes extensions so if you file for an extension that pushes you out to

October 15th then you have three years from that day under which to file an

amended return. So that covers the when, the when it's typically a three-year

window from the date of filing including extensions. Now the why - the why we just

touched on a few minutes ago. You may have realized that you left off a

deduction you may have received an amended K1 or 1099 or you may have

received advice on an alternative way for reporting or stating a transaction.

All of those are valid reasons for which to file amended returns. Now there are

always other considerations in each return needs to be taken on a

case-by-case basis and as I always do I recommend you sit down with a CPA and

review that and look at it with them and decide if your situation is going to

raise any unforeseen problems or if it's going to be advantageous for you to file

that amended return. Now, finally the how - the how would be a situation where we

take your tax return as it was filed and then we apply the changes, whatever they

may be, and once we have that newly formed and created return

with the changes we attach a cover form to that a form

1040X. We fill that out, we submit that to the IRS with a variety of documentation.

We have to mail that in, we can't e-file those yet for individuals, and then,

usually somewhere in the 90 to 120 day range you'll receive a letter back and

it says that they've either accepted your changes or they might need

additional information. Regardless, I recommend you sit down with a CPA to

help you determine if this is something that's going to work for you or be

an advantage for you. If you have any questions, comments, or ideas for future

podcasts, we'd love to hear from you. We always enjoy your feedback and our

contact information will be shown at the end of the broadcast.