If you wonder why you owe so much in taxes to the government, there is a chance they have made a mistake. You could be eligible for a tax refund if you discover a mathematical error or an apparent mistake on your tax return. If your filing status, income, deductions, credits, or tax liabilities change, you must file an updated return. Form 1040-X is used to rectify a previously filed Form 1040, Form 1040-SR, Form 1040-A, Form 1040-EZ, Form 1040-NR, Form 1040-NR-EZ, or to modify amounts once modified by the IRS. You can also utilize Form 1040-X to submit a claim for a carryback owing to a loss or unused credit;

You may also be allowed to utilize Form 1045, Application for Tentative Refund, instead of Form 1040-X. Also, if Form 8938, Statement of Specified Foreign Financial Assets, applies to you, file it along with your annual or amended return. 

Information about this topic is widely available on the official website of the IRS. Still, rules and regulations, forms, and financial hassles can cause you time and focus. In the case of serious issues, it is always best to consider talking to a tax consultant. If you owe more tax and the due date for filing that tax return hasn’t passed, you can avoid extra charges if you file Form 1040-X and pay the tax by the filing due date for that year. Make sure you pay the tax bill in time regardless of your tax amendment. In the case of justified debt repayment, late payments can cause further penalties and interest.


How to file your tax amendment?


The process is pretty simple if you wish to file for an amended return. Firstly, you should collect your original tax return and any additional papers required to file your revised return.

You may get a new or modified W-2 or 1099 form if you need to modify the income you stated on your return. For example, suppose you failed to claim a tax deduction or credit. In that case, you’d need paperwork to support the new deduction, such as a charitable gift receipt, a new or modified Form 1098 Mortgage Interest Statement, or Form 1098-T to claim an education credit.


In addition, when filing an updated return, you should include any new papers required to support your modifications. For example, the modification includes a new or amended W-2 or 1099 form to record increased income, a new or modified Form 1098 Mortgage Interest Statement, or a Form 1098-T to claim an education credit.


What about processing?


It may take up to three weeks for your updated return to appear on our system after you mailed it. After that, It might take up to 16 weeks to process. As mentioned before, you should always make obligation payments, regardless of your expected outcome.


How the fresh start program can help


With the fresh start program, the IRS offers a way out for people who cannot cope with tax debt. In most cases, the IRS will allow special programs that help you pay back your debt in an organized and respectful manner. Sometimes, the IRS might even levy part of your tax debt to ensure you can live life again without being squashed by debt. When in extreme debt, it is essential to consult a professional to see whether you have the eligibility to apply for the fresh start program.

The most favorable scenario consists of an offer of compromise. In this case, taxpayers and the IRS can resolve their tax obligations by relieving a portion of the amount owed. Generally speaking, if the IRS believes the debtor can fully pay the debt in one lump sum or through a payment plan, they will not accept an OIC. Instead, the IRS looks at their income and assets to establish the taxpayer’s realistic collection potential.

In most cases, you cannot qualify for an offer in compromise, but there are more options. For example, there might be a way out for you through different rules and regulations if you have significant debt levels. Don’t hesitate to contact one of our trusted tax professionals to see what’s possible for your situation.