Amending a Tax Return
I was recently asked by a family friend if I would be willing to look over their tax return to see if I could tell why they did not receive their stimulus payment. (Not really sure why they asked me, but hey, I guess it’s a compliment).
The first thing, and most obvious thing, that I checked was whether or not they should have received it by now. I just looked at the IRS time line of when stimulus payments were supposed to go out (Stimulus Payment Schedule). Because their original return was submitted on time and their refund came via direct deposit I knew they should have received it by now.
The second thing I check was whether or not they had sufficient qualifying income. According to the “fine print” of the stimulus payments you must have at $3,000 of qualifying income (Qualifying income includes any combination of earned income and certain benefits from Social Security, Veterans Affairs or Railroad Retirement). After reviewing of their original return they only had $1,012 of qualifying income. However, they had an additional $4,000 of income listed on line 21 as “other income”. I found out that this “other income” was actually income from a side business they had started in order to make a little extra income. With that knowledge I now knew that this should actually be categorized as business income (a.k.a. qualifying income) and not other income.
The final thing I had to do was figure out how to file an amended return. After a little searching on the IRS’s website I found the solution. It is actually relatively easy. There is one form, two pages (1040X), that must be filed out and mailed in along with any supporting documentation.
What did I learn from the process…….
- Find a friend to help – Although I am by no means an expert in the area of tax I was able to save them a $400+ charge from H&R Block just to tell them what was wrong and file the amended return.
- Search online for 5 minutes – Literally, it me less than 5 minutes of searching on IRS.gov to find out how so file an amended return.
- If your original return was wrong, amend it – After about one hours worth of work I was able to get them an additional $1,600 in refunds ($900 of stimulus payment and $700 of additional earned income credit)
- Call for help – If you are unsure of whether you are doing something right, give the IRS a call…that is one of the reasons we pay taxes. IRS Help
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2 Responses to “Amending a Tax Return”
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That’s great you were able to get them all that money back. My question is how did you know what to look for? If I looked at a tax return I wouldn’t have the foggiest idea of what to look for.
Lucky for them. I had to pay taxes