Did You Overlook Something on a Prior Tax Return?

Occasionally, clients will realize that an item of income was overlooked, a deduction was not claimed, or that an amended tax document was received after the tax return was already filed.  Regardless of whether the oversight will result in more tax due or a refund, it should not be dismissed.  Failing to report an item of income will most certainly generate an IRS inquiry, which typically happens a year after the original return was filed and after the interest and penalties have built up.  On the other hand, if you have a refund coming, you certainly don’t want that to go by the wayside.  

The solution is to file an amended return as soon as the error or omission is discovered.  Amended returns can also be used to claim an overlooked credit; correct the filing status or the number of dependents; report an investment transaction that was omitted; submit delayed K-1s; or anything else that should have been reported on the original return.

If the overlooked item will result in a tax increase, penalties and interest can be mitigated by filing an amended return as soon as possible.  Procrastination leads to further complication once the IRS determines something is missing, so it is best to take care of the issues right away.

You may also elect to amend your 2008 return if you are eligible to claim the new first-time homebuyer credit of up to $8,000 for a qualified 2009 home purchase.  The amended tax return will allow you to claim the homebuyer credit on your 2008 return without waiting until next year to claim it on the 2009 return.

Generally, to claim a refund, an amended return must be filed within three years from the date the original return was filed or within two years from the date the tax was paid, whichever is later.

If any of the above applies to your situation, please give this office a call so that an amended tax return may be prepared for you.

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