In a one-of-its-kind announcement, the IRS recently took a landmark decision allowing taxpayers to file their amended returns electronically. Yes, you heard it right! You can now fill out the Form 1040-X, Amended U.S. Individual Income Tax Return, and submit it electronically from later in the summer this year.
This comes as welcome news as before; amended returns were filed using paper, which used to take six to eight weeks of processing time. And with the COVID-19 pandemic and nationwide lockdown, this might have taken even longer than the usual case.
We know that since ages, taxpayers and tax professionals have longed for this day to file amended returns electronically. And as per the IRS, the same has been a goal for the agency for years now.
Since e-filing is already a big success with 90% of the taxpayers filing their returns electronically now, the IRS team faced specific unique challenges in making the filing of amended returns electronic too. But alas, all of us – taxpayers, tax professionals, and the IRS itself is relieved and is seeing this vision come true.
If we talk about stats, then approximately 3 million amended returns are filed every year. We expect this number to surge, seeing the nationwide lockdown and taxpayers’ hopes to change elections related to dependents and refunds using the opportunity.
The MyTaxFiler team advises that you should be cautious while filing the amended return, especially if you are doing it to correct more than just a missed line item or correct a transposed number. We say this because merely filing an amended return might not help you adjust any tax fraud or see to a significant omission such as skipping a foreign compliance form. If it is something vital that you plan to do using the amended return, then we suggest you first consult your tax preparer or tax professional to help you see through the correct process.
Another point in the highlight which might act beneficial to some is that – Don’t use the amended return to file for an injured spouse claim. In this case, you should use Form 8379 (Injured Spouse Allocation). Additionally, you should also ensure to request a refund of penalties, interests, and things like using Form 843 (Claim for Refund and Request for Abatement) and not the Form 1040-X.
Though this news might get some of you excited, keep in mind that as of now, you can only file amended returns for the tax year 2019 Forms 1040 and 1040-SR electronically when this program launches soon.
Also, this news doesn’t mean that you can’t file your amended returns using paper now. You definitely can, but in situations like these, most of us would want faster processing of our forms, and what is the best way if not electronic?
Whether you file electronically or not, all the same rules and statutes of limitation apply in both cases. The benefit of filing online is that, first, your form processing time reduces multifold. Additionally, you also get to use the “Where’s My Amended Return” online tool to check the status of its whereabouts. What’s better than this?
The news is a great one, but it requires an in-depth analysis of how you wish to go about it. We would suggest you consult your tax professional to file amended returns. If you want to discuss more on this or any other tax-related issue, please contact MyTaxFiler at C19Grants@mytaxfiler.com.
Published on 3/6/2020