How to File an Amended Tax Return

1040A few years ago I was preparing my taxes with TurboTax when I reached a piece of information I didn’t have (nowadays you can flag it as a place to return to before finalizing your return). Rather than leaving it blank, I put in a placeholder value… and promptly forgot about it. I filed my return, printed out a copy (this was before I decided going all electronic was a better option), and went about on my business. A week or so afterwards, as I was reviewing my return before filing away, I noticed I had put in a placeholder value.

It was for self-employment income and I had put in a nice round $10,000. My actual earnings were slightly higher and all of it was reported on a Form 1099-MISC, so the IRS knew that I made more than $10,000. Plus, $10,000 on the nose is awfully suspicious, especially since I was being 1099’d from about a dozen different places. So I knew I had to file an amended return and I found it to be, relatively, easy. Unfortunately, it’s paper only.

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Don’t Pay to File the 1040-EZ

Income TaxDid you know that millions of Americans pay a tax preparer to file their 1040EZ? It’s a single page with ten blanks! According to the Department of Education’s National Assessment of Adult Literacy, 20 million Americans pay someone to file their 1040EZ (courtesy of Red Tape Chronicles).

It’s pretty amazing right? There’s no reason why you should pay someone to file your 1040-EZ because it’s literally 12 lines – one of which is for refund information (where to send your refund).

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Tax Return Filing Deadline

It’s September 15th, do you know where your tax return is? (please laugh or it’ll be uncomfortably quiet in here)

If you filed your taxes on April 15th, you can ignore this post. If you requested a tax filing extension, let this be a reminder that your tax return will be due in exactly one month. October 15th is the tax return filing deadline for people who requested and were approved for a tax filing extension.

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How to Get Old W-2 and 1040 Tax Forms

If you ever need a copy of old 1040 tax forms, there are a few options for you to pursue.

Transcript or Full Return?

Depending on what you need the return for, you can sometimes get away with providing only a transcript. A transcript is just a listing of all the line items from your tax return and won’t include copies of your W-2, 1099s, or other documents filed. These usually satisfy the needs of most requests, such as a bank, and are provided free of charge from the IRS via Form 4506-T: Request for Transcript of Tax Return or by calling 1-800-829-1040 to place your order.

If you need the whole thing, there are two options.

Tax Preparer

If you used a tax preparer, such as H&R Block, you should call them first. They usually will keep copies of your tax returns on record for a few years and can provide a copy for you. They may or may not charge a fee but it’s often the quickest way you get a copy of your return.


If the preparer doesn’t have a copy or you didn’t use one, you can submit a request directly to the IRS on Form 4506: Request for Copy of Tax Return for $39 a piece, paid with the form, and up to 60 days.


Your Tax Return as a Subtle Financial Planner

I forget what show I was watching, but it was one of those shows where you have all that Bloomberg ticker crap taking up 75% of the screen and little faces jibber jabbering in the leftover space, but the guy talked briefly about how your IRS 1040 (the full incarnation of the form everyone fills out for taxes) gives you subtle reminders of the things you should do to help plan your financial future. I didn’t watch the whole thing but I thought it’d be fun to go through each relevant line (yeah, I’m a sadist) and see how it could be used as a subtle yearly financial plan reminder.

Line 8a – Taxable Interest
Line 8b – Tax-exempt Interest
There are investment vehicles out there that are tax exempt at certain government levels. For example, an EE/E bond is exempt from State and local income taxes but not from federal taxes. This is a reminder that sometimes your most conservative assets may be better placed in a tax-exempt bond than in a savings account bearing 3.0%. Of course, you sacrifice flexibility but you should know tax-exempt investments are out there but you do keep Uncle Sam’s grubby little paws off your loot.

Line 13 – Capital gain or (loss)
This is something you can only capitalize on if you remember it before December 31st. If you have a loss and want to write it off, sell it to offset a gain you may have had. Just remember not to repurchase shares in the same company within 31 days or the “wash” rule will bite you (and you won’t be able to write off the loss). Did you buy shares of JDS Uniphase and got burned badly in the bubble? Yeah, me too, write it off now because they’re never going to break even for you.

Line 15a – IRA distributions
Line 25 – IRA deduction
Contribute to a Roth or any other type of IRA? These lines are a reminder that perhaps you should be planning for your retirement because Social Security won’t be enough to sustain a lavish retirement lifestyle! 🙂 Retirement planning, especially for young workers, is critical because it is something that benefits with the passage of time. The more you sow now, the greater the benefits you will reap in the future. You want to be living in luxury when you’re retired, not a cardboard box. (You cannot deduct Roth contributions on your return, I just intended for that line to serve as a reminder to plan for retirement)

Line 33 – Penalty on early withdrawal of savings
Tsk tsk! That IRA or 401k isn’t a slush fund you can withdraw on to buy that shiny [whatever]. Let line 33 be a reminder that you will be penalized for mortgaging a portion of your retirement for gratification now. Alright, I’m just kidding about the severity but you should be readily dipping into your retirement for every thing. Sometimes it makes financial sense, but most (90%) of the time it’s a bad idea. (Example of good ideas? In times of hardship, dipping into the retirement savings may be unavoidable)

Line 49 – Education credits
The government will help you educate yourself, even if your employer will not. Learn about Hope Credit and Lifetime Learning Credits and see how you or your dependents may benefit from them.

Unless I’ve missed anything glaring, those 5 “lines” cover a lot of the basic financial planning advice given out these days. Consider all investment opportunities with respect to the tax advantages, plan for your future, don’t mess up your future by needlessly borrowing from it, and always educate yourself. I’m not saying that the dreaded tax form should be your financial advisor, a human being almost always beats a piece of paper, but it gives you a couple subtle reminders for things you may have forgotten or conveniently ignored. Take a look at your return and see if you’ve taken advantage of everything you could’ve.


Avoid Common Tax-filing Mistakes

So on the front page of Yahoo! Finance there’s an article by Kay Bell from titled “15 common tax-filing mistakes you can avoid” (article removed from site) that posted yesterday. Most of these errors are simply careless. It’s like when you took that arithmetic test in elementary school and did all the math in your head because you thought you were smart. You are smart… you just mess up sometimes. With Free Tax Filing (endorsed by the IRS!) and lots of free e-Filing methods, there is almost no excuse for any of these “mistakes.”

Here is the list:
1. Making math errors
2. Not including Social Security numbers
3. Not signing and dating your return
4. Not using the preprinted label and envelope from the tax package
5. Forgetting about interest and dividends
6. Forgetting to claim charitable donations
7. Not including all your forms
8. Not properly tracking your investment basis
9. Using the EZ form when a longer form could cut your taxes
10. Making the check out incorrectly — and forgetting to sign it!
11. Forgetting to bunch your deduction
12. Not taking all the credits you’re eligible for
13. Using the wrong tax table
14. Missing the deadline to request an extension
15. Not putting the proper postage on your return package

I put in red every “common mistake” that is automatically avoided as a result of using tax filing programs and using e-file. The only ones I can see that you might mess up on is not bunching your some of your deductions and tracking your investments. It makes no sense not to use a free program (you can even print out a return if you want to tempt fate and try to make errors 3 and 15) and I don’t see a benefit.

TurboTax does everything online so you don’t need to download a program you’ll never use again. (Read a review of TurboTax) Don’t want to send anything unnecessary online? Try TaxAct. Download some software and run it all locally. (Read a review of TaxAct)

There is no reason why you shouldn’t do your taxes electronically and there are at least 15 common reasons why you should.

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