If you file a tax return and then later realize that there’s a mistake on your return, or that you need to change a number that you’ve reported, then you’re required to file an amended tax return.
Common situations that require filing an amended return include:
- You forgot to claim a deduction or credit.
- You receive an amended W-2 from your employer (or 1099, 1098, K-1, etc.) after filing your return.
- You’ve received a letter from the IRS stating that you didn’t include a certain piece of information (typically, some sort of income) on your return, but the IRS has made an error in determining the additional amount that you owe.
The most frustrating thing about amended returns is that they can’t be e-filed. The only option is to mail in paper returns, hope that they get to the right department, and then wait forever for them to be processed.
I generally budget at least two hours for amended tax return preparation, which translates into a fee in the $160-$200 range.
(If you need to file an amended return due to my error, then I’ll of course do that for free!)