Thursday, April 17, 2014

Three instances when you should amend your return

With tax season over we turn our focus to other things in our life, like more taxes :)

Seriously, now that tax season has come to a close we have a chance to reflect on tax seasons now past. For most of us, we assume when the return is filed that the case is closed and we look forward to next year when we can get our taxes out of the way (yeah right). But, if you have one of these instances you might want to seriously consider having someone review your return, before you get a love letter from the IRS.

1. You did not report your stock sales on your return. Stock sales, bond sales, and sales of investments outside of retirement accounts are like the gift that keeps giving for the IRS. I cannot tell you how many times during the year I get that phone call. It usually starts out like this, " Hey Tony, yeah, I forgot to tell you that I sold some stock (bonds, whatever) during the year, but I lost money on the sale and the IRS says I owe a bunch of money. What's the deal?" Recently there have been changes in tax reporting due to stock sales that are designed to eliminate these issues. But generally speaking, if you have sold investments and not reported them on your return, you should strongly consider the advice of an expert.

2. You did not understand the questions from your tax preparation software, and now you are thinking that you either paid way too much, or not nearly enough in taxes during the year. Did you know that your return, once filed usually has a three year audit window. This is important when you are filing incorrect information. But more important, if you have a situation where the information on your return was fraudulent, then the audit window does not close...Bad news for all you scammers out there (just kidding).

3. If you did not report all of your withholding for the year. This might sound obvious. But you would be surprised, how often we review prior returns and find that someone overpaid due to a clerical error (usually if you underpay the IRS or local government is more than willing to point out your mistake for you).

If you think you fall into one of these categories, or you have your own, I would love to hear it.

Until next time, happy taxing.

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