I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.
Hopefully, you’ve heard somewhere from someone that you should look into reviewing your tax returns every so often. The recommendation is every four(4) years, just in case a refund can be had by amending returns, and you’d be afforded the ability to apply for a refund, on a previously assessed and paid tax. Sometimes you can accomplish this by merely placing the returns side by side on a table to spot anomalies, and other times you may need to perform a more in-depth assessment of the sequential tax returns. In any case you’d be wise to review your tax situation, which includes a brief analysis of your tax returns.
Reviewing your returns can give you piece of mind that your returns are not waving in the wind for the IRS, like a giant red flag, for the Service to initiate an audit. Costing you both time and money (audits are rarely taken by professionals on “flat fee” basis, due to their very nature of being difficult to absolve quickly, and efficiently. Also, reviewing tax returns can also prompt you to amend and pay a tax prior to receiving an audit notice or even after receiving one, if you believe Criminal Investigation may get involved (paying an outstanding tax bill when CI may get involved, is a way to stave off an investigation, due to the fact that DOJ is reluctant to get involved when there’s no monetary benefit to the federal government at the conclusion of a tax case).
So, how do you know whether or not you should file form 1040X, and amend a prior tax year? Well, a change in your filing status from/to Single or Married Filing Separately; A “Substitute For Return” has been filed for you by the IRS (the standard deduction is automatically given) are good reasons to amend prior year taxes. Remember the Assessment Statutory Expiration Date (ASED) does not start unless an actual return has been filed by the taxpayer. Here are some other good reasons (additional child tax credit and unemployment tax breaks are not amongst them):
- If you are due a refund from any of the three(3) previous tax years (ex. 2017, 2018, 2019) you should file an amendment- you only have three(3) years from the original due date of returns to file for a refund
- If you find you (or your preparer) may have made an error.
If you are one of the individuals from this tax season, who is confused about certain aspects of the new legislation, or just feel as though you would at least like to discuss mitigating your tax bill and the IRS’s impact in your life. Feel free to contact us in regards to our Tax Representation/Consulting Services, as well as our potential tax planning and savings ideas. https://brtaxaccountant.com/