Made A Mistake On My Federal Return. File An Amended Return ASAP, Or Wait ?

[cathy63]

Interesting. I wouldn't have thought you could amend before the due date (April 18th).

Yes, you can file an amended return any time after filing the original return.

 

[cathy63]

Can I interpret this to mean that the returns that don't reconcile EIP correctly are automatically adjusted in some way rather than suspended in manual review process?

I don't know if it's automatic or if there's a manual intervention required. My perception is it's happening faster this year than last year, but even last year we had multiple people in this situation get through the process before the end of tax season. Returns with incorrect stimulus claims weren't hung up for months on end.

 

[ownyourfuture]

I recommend against filing an amended return for this. We've dealt with it fairly often at my Tax-Aide site (we try very hard to get people to check with their bank before we file their return, but some are very sure they never got it, and then they come back with "well, I decided to check with the bank and ...").

What usually happens is that the IRS direct deposits the refund and withdraws the previous stimulus payment around the same time. Sometimes the withdrawal happens first, so make sure you have $1400 in your account. Sometimes they just subtract $1400 from the refund and do a single deposit. They will also send a letter with instructions on how to appeal their decision. I don't believe amending your return will make this process go any faster. The IRS knows whether or not they sent you a stimulus payment and it doesn't seem to be slowing down refunds much this year.

If the original stimulus was not direct deposited, or if you requested your tax refund to be a check, then they will hold up your refund until they've corresponded with you. In this case, filing an amended return might resolve it faster.

Received a check for the 1st stimulus ($1200) The 2nd stimulus ($600) was originally issued as a debit card. I went to the card issuers site, created a username and password, entered my bank info, and changed it to a direct deposit.

Received the 3rd stimulus ($1400) via check. Dates & amounts

05/22/20 Stimulus #1 $1,200.00 *Check*
01/15/21 Stimulus #2 $600.00 *Direct Deposit*
04/07/21 Stimulus #3 $1,400.00 *Check*

As for my annual tax return, I've always requested/received a check when I have a refund coming, & mail them a check when I end up owing.

So it looks like they will hold up my refund until they correspond with me.
I have no need for the refund $, so unless it took an outrageous amount of time, I would be fine with that.

Also called the local H&R Block office today. Talked to a very nice tax preparer. Told him I used H&R Block & filled him in on the $1400 mistake I made.
His advice was the same as the vast majority of people who replied to this thread, do nothing.

He went on to say that if I receive the incorrect refund amount ($3290) go ahead & deposit the check, file an amended return, & include a check for $1400

If I receive a check for $1890 (the correct refund) i'll know they corrected the error and sent me the correct refund.

He also suggested going to the IRS website & checking on the status of my return. Here's what it showed.

 

[ownyourfuture]

Looks like the prevailing theory (at least in my case 'incorrectly receiving a $1400 credit') is to wait for the IRS to correspond with me.

Regarding the screen cap above. I've never actually registered at the IRS site.
I got this by going to the section 'where/what is my refund'

Would registering give me more information, and/or be more up-to-date ?


After I e-filed, & recognized my mistake, I went back into the return & corrected it. As expected, this lowered my federal refund by $1400.

The state return didn't change. Is that correct ?
In other words, regardless of when & if the IRS recognizes my mistake, will it affect my state return ?

Thanks

 

[cathy63]

I don't see a screenshot in your post, but the IRS has only had your return for 2 business days. So far they've verified the SSN(s) weren't used on any other return and the EINs were entered correctly. That's what the "accepted" message you get shortly after you e-file means. Everything else takes two to three weeks, or longer if anomalies are found. You're going to be in the "anomalies" group, so don't expect to hear from them before early April.
Registering an account won't hurt, but it's not going to give you any additional information right now.

Your state return is not likely to be affected by the credits on your Fed return. I think most states start with the Federal AGI and do their own adjustments and calculations from there. The AGI is calculated before you claim the stimulus credit, so it has no impact on the state.

 

[ownyourfuture]

I don't see a screenshot in your post, but the IRS has only had your return for 2 business days. So far they've verified the SSN(s) weren't used on any other return and the EINs were entered correctly. That's what the "accepted" message you get shortly after you e-file means. Everything else takes two to three weeks, or longer if anomalies are found. You're going to be in the "anomalies" group, so don't expect to hear from them before early April.
Registering an account won't hurt, but it's not going to give you any additional information right now.

Your state return is not likely to be affected by the credits on your Fed return. I think most states start with the Federal AGI and do their own adjustments and calculations from there. The AGI is calculated before you claim the stimulus credit, so it has no impact on the state.

Great stuff, as always.
Thank You

Not sure why the screen capture didn't show up ?
I'll try again.

 

[ownyourfuture]

Received my state refund yesterday. Fed return still 'processing'

 

[foxfirev5]

Since I file paper returns any amended 1040X forms are filed ASAP. Since I never plan to get a refund I have no concerns at that point.

 

[RE2Boys]

You can choose to amend or not. I personally would file an amended return for myself or for my Tax-Aide clients in this situation. If you don't file an amended return, then if there's anything else on your tax return that's not 100% clear because you don't have to report it (like 529 withdrawals for qualified education expenses), they will make the interpretation that disadvantages you most and increase the taxes they say you owe. At that point you have to write a more complicated response and possibly do an amended return anyway, so it's better to do one now and head that off, especially if you can e-file it.

Last year I received a letter from the IRS concerning not reporting 529 earnings on my 2019 return. It appears that they do a sampling of returns and ask for supporting information. Of course, I had the supporting qualified education expenses. In about two months they acknowledged receiving my reply but said they needed more time to make a final determination. About three more months later, they sent me an all is good letter. I had both sons in college at the time each with 529 distributions. Maybe they thought I had become confused as I also received the AOTC education credit, which I also justified in my reply. I'm also a Volunteer Income Tax Assistance (VITA) participant.

Wish AARP would get their act together locally, over half the returns I do are for elderly folks (like me).

 

[SirJon]

DO NOT FILE AN AMENDED RETURN FOR THIS! The IRS will catch it and fix it for you. I'm a professional tax preparer. I've already run into this circumstance and it took less than 2 weeks for the IRS to send a correction letter to my client. (You might need a professional to interpret the IRS letter for you though.. )

Generally, don't attempt to file a 2nd return as most (all?) software will not allow a 2nd efile. A paper file will currently take the IRS years to process as well, so don't do that either.

If you need to do an amended return, file it electronically only after you get your refund or after the filing deadline (April 18th this year). Too soon will gum up the works and possibly take years to resolve. Also, many states allow direct deposit on amended returns, but the IRS will only mail a paper check.

 

[ArmchairMillionaire]

H&R Block deluxe + state
E-filed yesterday afternoon & both the Fed & state returns were accepted. *both still showing accepted as I type*

Identified the mistake & corrected it.
Researched & found directions on how to do an amended return with the H&R Block software. (1040X)

Browsed both H&R Block & TurboTax support forums & found conflicting answers to the question “I made a mistake on my taxes, should I file an amended return now, or wait ?

Just an FYI... We had to file an amended return last year due to an inherited estate giving us capital losses as well as a missed IRA contribution.

According to the IRS "Where's My Amended Return?" site, my amended return was received July 26th, 2021 but still has not been processed. (As of yesterday - I check every week or so.) But they're sorry for any inconvenience.

So be prepared to wait, as they're still over a million amended returns behind.

I was able to get my state refund by mid-August, though.

 

[gooddog]

The IRS will find that mistake and correct it for you, no big deal at all.

 

[rathail]

I got a Schedule K after I filed. But, the item in question was on my Form8949 pulled from E*Trade as well. Although, I did need to find the cost basis to complete. The gain on 8949 was a little less than the Schedule K ($56). I will wait and see. Hope that is the best route.

 

[cb2008]

Pay all your taxes due m8 us the credit by 4/18/22

Your return will be held up for processing since you stated you did not get the last stimulus check. Make sure you have paid all the tax due on your return without the credit before April 18, 2022. The IRS will send you a letter of correction. If you somehow get the credit, which I doubt, file an amendment and return the Recovery Rebate credit with your amended return. You can efile amendments now so go ahead and do that if it makes you sleep better at night. My experience posting this comes from 40 years of doing my own taxes and 15 years as an IRS certified VITA volunteer.

 

[jkern]

I was afraid someone would ask that

The amount was $1400
The screwup occurred on the section titled
Let's see if you qualify for the Recovery Rebate Credit, where I was asked
"Did you get a third stimulus payment in 2021 (including any plus-up payments)?

I misunderstood that to mean I should've received 3 stimulus payments in 2021, instead of the 3 I've received in total since 2020.
So I chose 'no'.

This gave me a $1400 credit which I'm not entitled to.

I think the IRS will catch this with their computers and make the changes without human intervention. I would wait and see if your refund/owe comes minus the $1400. If they auto correct it you don't have to do a thing.

 

[jkern]

Your return will be held up for processing since you stated you did not get the last stimulus check. Make sure you have paid all the tax due on your return without the credit before April 18, 2022. The IRS will send you a letter of correction. If you somehow get the credit, which I doubt, file an amendment and return the Recovery Rebate credit with your amended return. You can efile amendments now so go ahead and do that if it makes you sleep better at night. My experience posting this comes from 40 years of doing my own taxes and 15 years as an IRS certified VITA volunteer.

You and I have very similar tax prep experience. I have been do my taxes (and some friends too) for 46 years and a VITA volunteer for 12 years.

 

[ownyourfuture]

Lots of new replies since I last checked in on March 11th. Thanks to all of you for taking the time.

Not sure if it's relevant, & I already stated it here, but to keep everyone up-to-date, I received my state refund about a week ago, & already deposited it.

I went over the entire thread, & have 1 new question & 1 comment.

Jerry1: In this scenario, I would not do anything. My belief is that they will catch the error. Of course that’s going to hold up your refund, but it should work itself out. I did exactly the same thing on my MIL’s return last year. Me and DW, who handles her mom’s finances, had a miscommunication about whether she received all the payments or not. I missed one, overstating the refund, and the IRS corrected it and sent the correct amount back. Let it play out. You can always amend it next year after you give it time. The IRS is too screwed up right now to risk filing another return. Especially since you can’t file it electronically.

I would have no problem ‘letting it play out’ as I don't need the approximate $2000 (the correct refund amount) @ this time.

Regarding your statement “especially since you can't file it electronically”
Hypothetically, let's say the IRS misses the error, & I receive a refund check of $3400 next week.

If that was the case, I'd definitely have to file an amended return. When you say I can't file electronically, do you mean I couldn't do that with the H&R Block software I purchased, or does it mean that even if I went to H&R Block directly, and had them do a new amended return, they couldn't file electronically either ?

I seem to recall others mentioning that ‘you can’ file an amended return electronically ?

Related: Again, this is hypothetical, but if the IRS missed the mistake & sent me a check for $3400, (instead of the correct amount of $2000) shouldn’t I wait until after April 18, 2022 to file an amended return ?



ArmchairMillionaire23: According to the IRS "Where's My Amended Return?" site, my amended return was received July 26th, 2021 but still has not been processed.
(As of yesterday - I check every week or so.) But they're sorry for any inconvenience.

WOW!
Had no idea the IRS was that messed up. Astounding to me, that supposedly, we’re the strongest/richest nation on the planet, yet we’ve allowed the organization in charge of taxation to turn into the mess it is today.

I'll just have to hope that they notice the error & take corrective action.

 

[gauss]

I was afraid someone would ask that

The amount was $1400
The screwup occurred on the section titled
Let's see if you qualify for the Recovery Rebate Credit, where I was asked
"Did you get a third stimulus payment in 2021 (including any plus-up payments)?

I misunderstood that to mean I should've received 3 stimulus payments in 2021, instead of the 3 I've received in total since 2020.
So I chose 'no'.

This gave me a $1400 credit which I'm not entitled to.

This is issue is near/dear to my heart this year as I am also a TaxAide volunteer.

I have relied on the IRS published guidance on how this will be handled.

My interpretation of this guidance is as follows:

1) If line 30 (Recovery Rebate Credit) is blank or $0 then the IRS will ignore this line and not check on what they think they may still owe you.

2) If line 30 contains a non-zero figure, the IRS will compare this figure to what they *think* that they owe you. If the figures match the return will be processed normally.

3) If the value on line 30 (non-zero) does not match what the IRS *thinks* that they owe you, your return may be processed slower than normal. The amount of your refund/balance due will be automatically adjusted by the IRS and you will receive a letter documenting this. The letter will contain a number for further questions to the IRS about this. This case is interesting in that there are possibilities where the IRS *thinks* that you received a certain amount but you did not actually receive it (ie lost destoryed check - debit card discarded as junk mail etc. etc.). They should be able to tell you how the payment was sent and procedures for followup/tracing the payment once you know how they think that they sent it.

I advise clients that if they truly don't think they received all that they should have received, we can put a non-zero figure on that line and the return will be delayed, but they should received the letter with more specific information. I make sure that they understand about the potential delay so that if they have cash-flow issues that they will not be surprised.

No amended return is required for any of this to happen.

My source for this was the IRS FAQ on EIP payments issued earlier this year. Checkout Q/A E2 on pg 17 of the pdf in particular.

-gauss

 

[gauss]

Just an FYI... We had to file an amended return last year due to an inherited estate giving us capital losses as well as a missed IRA contribution.

According to the IRS "Where's My Amended Return?" site, my amended return was received July 26th, 2021 but still has not been processed. (As of yesterday - I check every week or so.) But they're sorry for any inconvenience.

So be prepared to wait, as they're still over a million amended returns behind.

I was able to get my state refund by mid-August, though.

I filed with the IRS an amended return for 2018 in February 2020. This was actually the 2nd time this return was amended.

Where's my amended return acknowledged that the return was received in Feb 2022 but no further action was happening.

I think in 3rd quarter 2021 (ie ~ 18 months later), I finally telephoned them on this one. I received a competent phone agent. She was not able to find the return in her system. I politely pointed out the evidence of the return existing as currently displayed in the Where's my amended Return System.

Her solution was for me to fax her the actual amended return with an appropriate cover letter etc. etc.

I believed that I received a payout with interest within the next month or so. The interesting thing was that I also received a letter from the IRS confirming this but the numbers in the IRS letter were wrong (doh!) Fortunately the actual check was correct.

-gauss

 

[Midpack]

I’ve read you should not file an amended return until you’ve received a refund (if due) - typically 3 weeks of there is a “typical” these days. I filed on 3/13 with a refund due (applied to 2022) so I am holding my amended return until 4/10 (additional refund that will also be applied to 2022). I haven’t had any luck determining if my 3/13 refund has been processed - no luck with the IRS Where’s My Refund app…

 

[ownyourfuture]

1) If line 30 (Recovery Rebate Credit) is blank or $0 then the IRS will ignore this line and not check on what they think they may still owe you.

Thanks for your input.

Not sure I can answer that question because of the following.

'After' I had e-filed the return, & realized my mistake, I went back into the return & made the correction. Instead of choosing 'No' I didn't receive a 3rd stimulus check in 2021, I changed it to yes.

This reduced my refund from $3290 to the correct total of $1890.
The amount shown on line 30 is now $0

FYI: I did receive the $1400 check & I deposited it in my checking account on April 7, 2021

 

[cathy63]

Thanks for your input.

Not sure I can answer that question because of the following.

'After' I had e-filed the return, & realized my mistake, I went back into the return & made the correction. Instead of choosing 'No' I didn't receive a 3rd stimulus check in 2021, I changed it to yes.

This reduced my refund from $3290 to the correct total of $1890.
The amount shown on line 30 is now $0

FYI: I did receive the $1400 check & I deposited it in my checking account on April 7, 2021

The return that you sent to the IRS has $1400 on line 30, so that's what they'll be using. Whatever changes you made after filing are not relevant.

I know it's hard, but you really just need to sit tight and wait for the IRS to send you a letter. They will eventually correct your error, but it's going to take a few weeks.

 

[ownyourfuture]

The return that you sent to the IRS has $1400 on line 30, so that's what they'll be using. Whatever changes you made after filing are not relevant.

Understood.

I know it's hard, but you really just need to sit tight and wait for the IRS to send you a letter. They will eventually correct your error, but it's going to take a few weeks.

My mother insists on doing her return by hand every year. Thursday afternoon I stopped at the local IRS office to get a couple more instruction booklets.

Other than myself, it was only the security guard, and one man sitting at a desk. The guy at the desk asked me if I needed help with anything ? Told him about my situation. The security guard stated "you're going to get audited for sure" then cracked a big smile and said just kidding!

The guy at the desk stated the same thing yourself and several others have.
"it'll be corrected, just be patient"

 

[ownyourfuture]

Just as most of you said, the best thing to do was sit back & wait.
Received the correct refund about 2.5 weeks ago.
Thanks for all the info/advice.