I Made a Mistake on My Tax Return - Should I Amend it?

Tax season is finally over. Yet, you now realize you made a mistake when filing your taxes. Should you amend your tax return?

As a family child care provider you shouldn't hesitate to amend your return. Your chances of being audited do not increase when you amend. Don't be shy about amending your tax return!

Use IRS Form 1040X Amended U.S. Individual Income Tax Return. You cannot e-file an amended return. I describe how to fill out this form, line-by-line in my Family Child Care Tax Workbook and Organizer.

You should amend your tax return if you forgot to report all of your income, you didn't claim all the hours you worked or all the meals you served, or didn't deduct all of your allowable expenses.

For every $100 of business expenses you claim on your amended tax return, you will probably get a refund of between $30 and $40.Generally, you must amend your return within three years from the date you filed your original tax return or within two years of the date you paid the tax, whichever is later. If you filed your 2021 taxes on April 1, 2022, you have until April 1, 2025 to amend your tax return.

Additional Rules to Follow

1) Do not amend your return if you made a mathematical error. The IRS will catch this mistake and correct it for you.

2) When filing Form 1040X, attached copies of any schedules that have been affected by your change. In other words, if you are adding additional repair expenses on Schedule C, attach a revised copy of Schedule C Profit or Loss From Business, Form 1040-SE Self Employment Tax, and Form 1040 U.S. Individual Income Tax Return.

If you are adding some additional hours, also include Form 8829 Expenses for Business Use of Your Home. Don't resend your original tax forms.3) If you are amending for more than one tax year, file Form 1040X for each tax year and mail them to the IRS in separate envelopes.4) If you owe additional taxes, file Form 1040X as soon as possible to minimize interest and penalties.5) If you are claiming an additional refund, wait until you have received your original tax return before filing Form 1040X. You may cash your original refund check while waiting for the additional refund.

New IRS Tracking System

It normally takes the IRS 8-12 weeks to process an amended tax return. You can check the status of your return online three weeks after your file your amended return. Go to www.irs.gov and search for "Where's My Amended Return?". You can also call 866-464-2050. This online and phone service is also available in Spanish.

State Tax Return

Amending your federal tax return may also require you to amend your state tax return.

Working with Your Tax Professional

If you are amending your tax return because of a mistake made by your tax preparer, you should ask your tax preparer to pay for the cost of amending the return. For example, you gave your tax preparer a list of the number of hours you worked in your home, but he/she did not report them all. If you didn't tell your tax preparer about a new couch you bought, you should expect to pay the cost of amending your return.

It may be that the cost to amend your tax return will be greater than any refund you will receive. If that's the case, don't amend.

See also my article "If I Amend My Tax Return Am I More Likely to Be Audited?"

Image credit: https://www.forbes.com/sites/shaharziv/2021/05/18/over-7-million-americans-could-receive-refund-for-10200-unemployment-tax-break/?sh=13a7b3662b22

For additional information on how to amend your tax return, see my book Family Child Care Tax Workbook and Organizer.