Changing your income tax

If I Amend My Tax Return Am I More Likely To Be Audited?

By Tom Copeland. Posted with permission

Probably not. Family child care providers can correct mistakes on their tax return by filing IRS Form 1040X Amended US Individual Income Tax Return.

You can amend your tax return back three years. So, you have until April 17, 2012 to amend your 2008 tax return. If you filed an extension on your taxes in earlier years, you have three years from the time you filed your tax return.

Child care providers amend their tax returns for a number of reasons: forgot to income some income, did not claim all the hours they worked or miles they drove, did not depreciate the furniture and appliances they owned before they went into business, and more.

If you have the records to back up your amended return, don't hesitate to amend. The odds of your amended tax return getting audited is probably less than 1%. If you don't have the records, don't amend.

Let's look at two examples:

1) After filing your 2011 taxes you realize you made a mistake. Your food deduction didn't include all the afternoon snacks you served that were not reimbursed by the Food Program. You have a daily record of how many afternoon snacks you served. Amend your return.

2) After filing your 2011 taxes you realize you made a mistake on your 2010 tax return. You did not count all the hours you worked in your home when children were not present. But, you didn't keep records of these hours in 2010. Don't amend your return.

When you amend your return you will file Form 1040X, along with a revised version of any tax forms that are affected by the amended form. This usually includes Schedule C, Schedule SE, and Form 1040. It could also affect Form 8829 and Form 4562.
What if my tax preparer made a mistake?

Let's say  you gave your tax preparer a list of furniture you bought in 2011. But, after sending in your tax return you realize that the furniture was not deducted. You should ask your tax preparer to amend your return and not charge you anything for doing so. But, if you never told your tax preparer about the furniture, it's not reasonable to expect your tax preparer to do this for free.

There is one way to reduce the chances that your tax preparer will make a mistake. Use my book 2011 Family Child Care Tax Companion. It contains a series of worksheets you fill out and share with your tax preparer. You can then catch mistakes by comparing your worksheets with your tax forms before you send them in.

If you amend your federal tax return it will probably mean that you must also amend your state tax return.

I've amended my tax return several times over the years when I forgot to claim some medical expenses. I always got my refund!

Image credit: askthemoneycoach.com
I wrote a chapter about how to fill out Form 1040X, line-by-line, in my book 2011 Family Child Care Tax Workbook and Organizer.

www.tomcopelandblog.com