Over the course of many years of questions from DIY income tax preparers, we’ve noticed a few patterns of common questions. Below are listed some of the most common questions and answers to those questions.
Answers to the Most Common DIY Income Tax Questions
1. Question: I’ve already filed my income tax return and I just received another W2 (or 1099, or whatever additional form). Should I file an amendment right now?
Answer: You should wait until your original return has completely processed before you file your amendment. You should then file your amended return (see the article at this link for more information about filing an amended tax return) as soon as possible. Delays in filing your amended tax return can result in penalties and interest charges.
2. Question: I’ve already filed my income tax return and I just received another W2 – but it’s only for a small amount. When I completed the amendment return there was no (or only a very small) difference in my tax owed or refunded. Will the IRS just adjust my return, or should I file the amendment?
Answer: Under-reporting of income can result in penalties and interest to you. You should file an amendment to ensure that all of your income has been properly reported, even though the result is no (or a very small) change to your tax. This way the IRS has record that you have reported all of your income.
Properly reporting all income when you are aware of it can be helpful to your case when you have mistakenly under-reported. If you disregard the additional income reported to you, it can be misconstrued as income tax evasion (strong word, I know). The IRS views minor infractions like this in a more positive light if you self-report your overlooked income as soon as possible.
3. Question: How can I find out if my tax return has been completely processed?
Answer: You can use the Where’s My Refund? tool on the IRS website to check the status of your return.
4. Question: I mistakenly claimed my child on my tax return as a dependent and I’ve already filed my return. The child’s father was supposed to claim the child. How can I fix this so that the father can file and claim the child as a dependent? A variation on this question is where a child has claimed him or herself as a dependent on his or her own tax return and it’s preferred to have the parent claim the child as a dependent.
Answer: In order for someone else to claim a dependent that someone else has already claimed, the original return must be amended, removing the dependent from the return. This amendment must be completely processed before the dependent can be claimed on another return.
5. Question: I have filed an amended return to remove a dependent from the return (we’ll call this Return #1) so that someone else can claim the dependent on their return (we’ll call this Return #2). The amendment has not processed completely yet, and the filing date is very near. How do we handle this situation?
Answer: There are a couple of different ways to handle this situation:
a) You can file an original return (Return #2) without claiming the dependent. Then, once the amendment (Return #1) has processed completely, an amendment can be filed on Return #2 to include the dependent. This has the benefit of providing some refund (if a refund is due) while waiting for the amendments to process.
b) You can file a request for extension (see this link for information about filing an extension) on Return #2. Then once the amendment has completely processed, assuming that it is processed before October 15, you can go forward with the filing of Return #2. The downside to this method is that you must pay any tax anticipated upon filing the request for extension, but that would be the case if you were able to file the original return on time.
6. Question: I filed my original tax return and have received my refund already. I’ve discovered that I need to file an amendment to my return. Can I cash the check, or do I need to send it back and wait for my amendment to process?
Answer: You are free to do what you wish with your original refund. However, if your amendment results in a negative difference in your refund – that is, if it results in a payment required – you should send along the payment required with your amended return. If your amendment results in additional refund, you’ll receive an another check.
7. Question: My husband and I are in the process of getting a divorce, but it was not finalized before the end of the year. I filed my tax return with the status of Married Filing Separately, and he filed his return with the status of Married Filing Jointly. His return was rejected – what do we do?
Answer: While you are married, either you both file your returns with the filing status of Married Filing Separately or you file one return together with the status of Married Filing Jointly. You can resolve this by amending your (accepted) return to change to Married Filing Jointly and include your husband on the return. Otherwise, your husband can file a return with Married Filing Separately as the status.
In most cases the status of Married Filing Separately (MFS) is a disadvantage over the status of Married Filing Jointly (MFJ). Many credits and deductions are not allowed when using the MFS status.
8. Question: I didn’t use my tuition payment (1098T) on my 2015 tax return. Can I just claim this payment when I file my 2016 income tax return?
Answer: Tax years are separate units for most every item. Income, credits, and deductions are specific to the tax year that they were earned or paid out. So if you want to claim credit for tuition payment made in 2015, you will need to amend your 2015 income tax return. It is not allowed to claim a 2015 credit or deduction on your 2016 return.
Do you have questions? Leave your questions in the comments below and we’ll do our best to answer them where we can!