Friday, November 28, 2008

A Word On Amended Tax Returns

Before I even begin the first thing I am going to say is this…beware! Amending a tax return is okay if you are amending it to include income you left off for whatever reason. It’s also okay to amend a return to include deductions you forgot to list completely the first time around. This is where I would say BEWARE.

Whenever the IRS receives an amended return with a lot of deductions that was not listed on the original return the look at the amended return very closely. The statistical probability of the return getting audited is much higher than just an ordinary return. Too many times in the past the IRS found situations where taxpayers filed their return, was hit with a substantial penalty and then tried to rectify the problem after the fact in the form of an amended return.

Don’t get me wrong. It is okay to file an amended return just make sure you have all of the supporting documentation to justify the expenses you are claiming. Many taxpayers have found themselves in need of the services of a professional tax resolution firm as a result of getting audited after filing an amended return and subsequently getting hit with a huge tax bill. Just remember…have your documentation to support whatever deductions you make!

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