Legal Definitions - amended return

An amended return is a revised version of a tax return that a taxpayer has already filed with the tax authority (such as the IRS in the United States). Taxpayers file an amended return to correct mistakes, report income or deductions that were initially overlooked, or make other necessary changes to their original tax filing after it has been submitted.

Here are some examples illustrating when an amended return might be filed:

• Example 1: Discovering an Overlooked Deduction

  Imagine Sarah filed her income tax return in April. A few months later, while organizing her financial documents, she finds a receipt for a substantial medical expense that she completely forgot to include on her original return. This expense would have qualified for a significant deduction.

  How it illustrates the term: To claim this overlooked deduction and potentially receive a larger refund or reduce her tax liability, Sarah would prepare and submit an amended return. This new filing corrects the original by adding the forgotten information.

• Example 2: Receiving Corrected Income Information

  David works as a freelance consultant and filed his taxes based on the 1099 forms he received. In July, one of his clients sends him a corrected 1099 form, showing an additional $1,500 in income that was not reported on the original form due to a clerical error by the client.

  How it illustrates the term: Since David's original return did not accurately reflect all his income, he is legally obligated to report the additional earnings. He would file an amended return to include this newly reported income, which might result in him owing a small amount of additional tax.

• Example 3: Changing Filing Status

  Maria and John got married in December of the previous year. When they filed their taxes in February, they mistakenly chose "married filing separately" because they were unsure of the implications. After discussing with a financial advisor, they realize that filing as "married filing jointly" would significantly reduce their overall tax burden.

  How it illustrates the term: To change their filing status and take advantage of the more favorable tax situation, Maria and John would file an amended return. This allows them to update their marital status and recalculate their taxes based on the joint filing status, potentially leading to a refund.