You should file an amended tax return if your filing status, income, or qualification for certain deductions or credits is different than what you claimed on your original tax return. The amended tax return deadline for claiming a refund is the later of three years from your original filing date or two years from the date you paid the tax. Currently you can only file an amended return by printing out and mail Form 1040X. Later this summer, the IRS will begin allowing taxpayers to file amended returns electronically via online tax software providers. This post has been reviewed for accuracy by Thomas C. Corley, CPA. See Business Insider's picks for the best tax software »
The IRS isn't going to punish you for making a simple clerical error on your tax return. In fact, if the IRS finds minor mistakes on your tax return, they'll often correct them for you. And if they need more information or additional documents, they'll reach out to you via US mail. For errors beyond basic arithmetic, you may need to file an amended federal tax return, or Form 1040X. The amended tax return deadline if you're claiming a refund due to the changes is the later of three years from your original filing date or two years from the date you paid the tax due. This includes any elected extensions. Other common reasons for filing an amended return include claiming a deduction or credit that you overlooked initially or receiving an adjusted W-2 or 1099 from your employer that changes your tax liability. This doesn't often happen at large companies, but may be more common with smaller employers with in-house bookkeeping. The IRS reports that, nationally, the average taxpayer filing an amended return spends nine hours preparing and mailing their forms, though the time burden varies depending on the type of taxpayer and whether they seek professional help. How can I file an amended tax return? Unfortunately you can't file an amended return electronically — yet. The IRS announced on May 28 that it would begin allowing taxpayers to file amended returns through online tax services later this summer. Until then, you'll need to print, fill out, and mail the form to the IRS. You can find the latest instructions here. To complete Form 1040X, you need the following:
A copy of the return (Form 1040, 1040-NR, or 1040-NR EZ; or 1040A or 1040EZ for previous years) you are amending, plus any relevant forms, schedules, or worksheets you previously filled out Any notices you received from the IRS on adjustments to that return Instructions for the return you are amending that correspond to the year in which the original return was filed — you can find these on the IRS website
You should also check with your state's tax bureau to find out whether you need to file an amended state return as well. How do I mail an amended tax return? To mail your amended tax return to the appropriate address, check page 18 of the 1040X instructions guide. The address corresponds to the forms you're amending and the state you live in. Is there a penalty for filing an amended tax return? Interest and penalties for late payment of taxes may be charged, but there aren't any fees or penalties associated with simply filing an amended tax return. You can check out the IRS instructions for more details. What's the amended tax return refund timeline? The IRS says it usually processes amended tax returns within eight to 12 weeks of the mailing date, though it could take up to 16 weeks or longer, particularly in cases of identity fraud. Beginning about three weeks from the date your return was postmarked, you can use the Where's My Amended Return tool on IRS.gov to track its status. To do so, you'll need to provide the following information:
Your taxpayer identification number or Social Security number Your date of birth Your ZIP code or postal code
The status of your amended return will move from received to adjusted to completed. If your return is adjusted, there will usually be a new refund issued or a tax balance due.
More tax day coverage: When are taxes due? How to file taxes for 2019 Should I do my own taxes? Credit Karma vs. TurboTax Where is my tax refund? Join the conversation about this story » NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America
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When file your taxes online, you might have the option to pay those tax filing...When file your taxes online, you might have the option to pay those tax filing fees through your refund. While it sounds easier than pulling out your debit or credit card, pay attention: Most online preparers charge an additional fee for this. If you can, pay the prep and file fees with a rewards credit card instead. You'll earn points or cash back, avoid a service charge, and get your refund in full. TaxAct is currently offering 35% off on Federal and State returns » Millions of Americans are looking forward to a tax refund this year. To receive yours as soon as possible, the IRS recommends filing your tax return electronically and choosing direct deposit. About 90% of taxpayers who use this method and are owed a refund get theirs within 21 days of submitting their return. Many Americans are eligible for free federal tax filing, but if you earn freelance income or have an otherwise complicated tax situation, you will likely need to pay tax filing fees to prepare your federal and state returns. If you use an online service like H&R Block, TurboTax, or TaxAct, you can start preparing your return for free. Most tax preparers don't require money up front; you'll typically pay the fees once you're ready to sign and submit your return. The IRS estimates it takes the average person about four hours to complete and file their return. By the time you reach the screen asking for payment, you're probably looking for the quickest exit route. Online preparers will give you the option to pay for their services via credit or debit card or through your refund. If you check the box to pay through your refund, you don't have to do anything on your end but simply wait for your share of the refund to be deposited in your bank account. Sure, that may sound easy, but be careful: Most preparers tack on an extra fee for this method of payment, and it's not insignificant. Paying your online tax preparer through your refund could cost you up to $40 extra H&R Block and TurboTax each charge an additional processing fee of $40 if you agree to pay through your refund. That's $40 on top of the fee you're paying for the package you selected, meaning you could easily double what you expected to pay. Efile.com and 1040.com, two of the best budget tax software options, charge an additional fee of $25 to deduct their fee from your refund. TaxAct charges its own fee plus bank fees. That's not to say these online tax preparers aren't worth your time. In fact, they're among the best options on the market. But if you want to make the most of your refund, don't settle for the easiest option — take an extra minute to pull out your credit card and avoid the unnecessary processing fee. If you can, use a rewards credit card to pay for online tax prep and filing instead of deducting the amount from your refund. There's usually no service charge to pay via credit card; you'll be able to earn rewards points or cash back, depending on the card you have; and you'll get your tax refund in full. Related Content Module: Countdown to Tax Day Join the conversation about this story » NOW WATCH: How waste is dealt with on the world's largest cruise ship
I ran my taxes through Credit Karma Tax and H&R Block. Here's how they compare on price, ease of use, and refunds.
This year I prepared my tax return on both Credit Karma Tax and H&R Block....This year I prepared my tax return on both Credit Karma Tax and H&R Block. I wanted to save money on preparation fees, get my maximum refund, and move through the process quickly and easily. Even though Credit Karma Tax is completely free, I chose to pay for H&R Block's Deluxe Online version. H&R Block enabled me to upload my W-2 for easy data input and got me about $200 more for my state tax refund than Credit Karma Tax. Try Credit Karma Tax or H&R Block before Tax Day 2020 » Many people don't realize it's completely free to file your federal tax return with the IRS if you go the pen-and-paper route. When you pay a company like TurboTax or H&R Block, you're covering the preparation fees. And it's usually worth paying for the extra help, since most of us aren't fluent in tax law. But if your situation is simple enough, you shouldn't have to spend a dime. H&R Block and TurboTax both offer free versions and Credit Karma Tax is completely free. But they're not all created equal. I've used H&R Block for the past few years and had a positive experience. This year, however, I knew I wouldn't qualify for free filing, so I tried out Credit Karma Tax to see if it was worth jumping ship. Credit Karma Tax vs. H&R Block: Which is better for filing taxes? It's hard to beat a completely free tax-filing product like Credit Karma Tax. No matter what your income situation looks like, Credit Karma will allow you to file a federal and state return for free. What it doesn't cover, however, could be a deal breaker for some people, including disallowing returns for people who earned income in a state they don't reside in and part-year state returns. H&R Block also offers free filing, but your situation needs to be fairly simple to qualify. If you're a homeowner, freelancer, or small business owner looking to maximize your deductions, you'll pay between $50 and $105 for an H&R Block package, plus an additional $45 per state return. H&R Block also has a superior user interface with easy tax document upload capabilities and clear step-by-step instructions. After running my taxes through both services, I wound up with a bigger refund from H&R Block, despite entering the same information. I didn't qualify for free filing at H&R Block, but it was worth paying the preparation fee to get an extra few hundred dollars in my state refund. Credit Karma Tax vs. H&R Block: pricing Credit Karma Tax is completely free for both federal returns and state returns and supports most tax situations; you just need a Credit Karma account to start. H&R Block is a part of the IRS Free File program, allowing taxpayers with an adjusted gross income (AGI) under $69,000 to prepare and file their returns for free, regardless of the additional forms and schedules needed. If you earned more than the Free File limit in 2019, you can still get free return prep through H&R Block. This version supports W-2 income, interest income, dividend income, retirement distributions, the student loan interest deduction, and the Earned Income Tax Credit. If you want to itemize deductions, have a Health Savings Account (HSA), own a home, or earn self-employed income, you'll need to upgrade to one of H&R Block's paid products. Deluxe Online: $50. Everything the free version includes, plus the mortgage interest deduction and Health Savings Accounts (Form 1099-SA), and you can itemize. Premium Online: $70. Supports everything in the Deluxe version, plus rental property income and freelance/contractor income below $5,000. You can also import mileage and other expenses from common tracking apps. Self-Employed Online: $105. This is the highest-tier online package offered by H&R Block. It's ideal for self-employed people, including small business owners, partners, and contractors who earned more than $5,000. If you're concerned about making mistakes, missing deductions, or getting lost amidst the tax forms, H&R Block can connect you with a professional for an additional fee. Online Assist: $40 - $140. These packages are nearly identical to the online filing options mentioned above, but you can chat instantly and share your screen with a tax expert, CPA, or enrolled agent. Tax Pro Go: $49 - $249. This is H&R Block's newest offering, which takes the work out of finding an accountant on your own and going into an office. You just need to answer a few questions about yourself to get paired with a tax professional. Then upload all of your tax documents to your online account and your tax pro will prepare your return(s) within five days. You'll review and sign your return(s), pay, and the tax pro will file them. If you're filing a state return too, you'll need to add an additional $45 fee to each of these price points. Winner: Credit Karma Tax Credit Karma Tax vs. H&R Block: ease of use The W-2 upload option saves a ton of time on data entry Businesses are required to mail your tax forms to you by late January, so you should have everything you need to file by now, including your W-2 or 1099, and any bank statements reporting dividend or interest earnings. If you're enrolled in electronic statements for your payroll provider or bank, the tax documents should be available in your online account for download. If you have digital forms, H&R Block makes it really easy to input the data on your income form to save time. You can either upload the PDF file or import it directly from your payroll provider. Either option takes just a few seconds. I usually double-check all the numbers to make sure everything is correct and I have yet to find an error. Credit Karma Tax also advertises W-2 upload capabilities, but the tool didn't work for me when I filed back in February. I tried it at least three times before giving up and entering everything manually. And though it's more of a quirk than a deal breaker, Credit Karma Tax asked me to choose from a list of occupations at the beginning of my return but didn't provide an option that even closely matched my actual job — a journalist. No "reporter," no "writer" ... not even "media." I wound up selecting "communication." The instructions were clearer on H&R Block On Credit Karma Tax, I had trouble figuring out where to enter my California State Disability taxes because some of the instructions were contradictory. I emailed Credit Karma's support team for help and still hadn't heard back after a few days. Other than that, Credit Karma offered helpful instructions along the way, but I ultimately preferred H&R Block's easy-to-understand explainers. H&R Block made it perfectly clear in layman's terms what I would see on my W-2 and what I would need to enter, and where, on its form. In my opinion, H&R Block excels at step-by-step guidance, which makes it a great choice for first-time filers or anyone who wants to be fully informed on their tax situation. If you're confused at any point and want further explanation for any form, you can search for more answers in a side-bar without leaving the page you're on. I used this tool liberally and found every answer I was looking for. Winner: H&R Block Credit Karma Tax vs. H&R Block: refunds Even though I set out to get my smallest refund ever this year by matching my withholdings to my tax liability, I still want to make sure I'm getting back every dollar I'm owed. Credit Karma Tax and H&R Block calculated the same federal refund for me, but the state tax refunds looked quite different. Credit Karma Tax calculated a state refund that was about $200 less than H&R Block. Maybe it had something to do with the previous issue regarding state disability taxes, but Credit Karma Tax never flagged an error in my data entry. Considering my refund amounts, even with the fee I would be paying H&R Block for the Deluxe Online package — a total of $67 for my federal and state returns (prices were discounted earlier this tax season) — I'd still wind up with more money in my pocket than if I went with Credit Karma Tax's free service. Winner: H&R Block Learn more about Credit Karma Tax » Learn more about H&R Block » This post was originally published in February 2020. It was updated July 8. Related Content Module: Countdown to Tax DayJoin the conversation about this story »