At COS Accounting and Tax we specialize in helping our customers save the most money possible on their taxes. But what if you have already filed? Fortunately, it is not too late.
Have you heard of tax amendments?
Millions of Americans report making mistakes on their taxes each year, but luckily, the IRS is pretty understanding of this and has created a way to rectify those mistakes. Tax amendments allow taxpayers to correct mistakes without having to completely refile. Tax amendments are also helpful as they allow taxpayers the opportunity to refile their taxes in order to claim more. In past years, the IRS required those filing amendments to do so by paper, but the IRS now allows for digital amendments — can we get a hallelujah?
Now, what would warrant a tax amendment?
Tax amendments can be used to correct errors such as:
Most of the math needed for your taxes is simple, however, it can be easy to mistake if you are not careful.
Missing or Inaccurate Social Security Numbers
You must list all Social Security Numbers exactly how they are presented on the Social Security Cards.
Incorrect Bank Account Numbers
To receive your tax return, the correct account and routing numbers are required.
All names must be spelled exactly how they are presented on your government-issued identification cards.
Incorrect Filing Status
Many taxpayers report confusion when selecting a valid filing status, fortunately, The IRS and other tax software offer guidance to help taxpayers select the correct filing status.
Incorrect Credits or Deductions
Oftentimes credit and deduction mistakes are caused by not thoroughly reading through the instructions.
An unsigned form is as valid as a blank form. All forms must have the appropriate signature.
Occasionally, the IRS will correct simple mistakes for you (such as math rounding errors), however, it is often in your best interest to fix the larger issues yourself.
Could I be using tax amendments as a resource to save on taxes?
Yes, absolutely! Tax amendments are not only for mistakes, they can also allow taxpayers to claim more than their initial return. This is possible by:
Claiming More Deductions
By reducing your taxable income, tax deductions slash the total amount of taxes owed. There are many unexpected tax credits and deductions from every facet of life, including school, kids, work, etc. Missing out on a couple of these could cost you thousands each year.
A partial portion of your rent, mortgage, property taxes, utilities, and maintenance can be deducted for the self-employed.
Work-related education can be written off since it can be considered as a way to further your business.
If you use your car for business activities, ensure you deduct a portion of your vehicle costs.
Supplies such as pens, staples, paper, ink, and postage add up. These everyday items can be deducted.
Phone and Internet Costs
If you use your personal cell phone and internet for business, a portion of your monthly expenses should be deducted.
Filing as an LLC S-Corp
The average tax rate for a 1099 employee is an astounding 15.3% whereas the average tax rate for those filed as an LLC S-Corp is 3%. This quite literally means you could be saving THOUSANDS of dollars by filing differently.
Will filing as an LLC S-Corp change the yearly tax process?
Yes, however, the process will be simplified! Filing as an LLC S-Corp will require that you pay your taxes quarterly rather than annually, however, this system will save you more throughout the year and won’t require that yearly gut-wrenching feeling when you pay your taxes. Plus we will handle everything for you- you’re welcome!
Is there any other way I could be saving on my taxes?
Last year, the Covid-19 Pandemic cost millions of people their jobs, and the unemployment rate skyrocketed to nearly 15%. In the government’s mission to rectify this loss of income, the IRS determined that an additional $10,200 of unemployment will not be considered taxable income anymore. This means that many people who previously filed taxes and owed money to the government are now eligible for substantial tax refunds. We are talking thousands of dollars here. Filing an amended return is worth it!
How long will I have to file a tax amendment?
You have three years from the original due date of the return or two years after paying taxes for that year (if it is later than three years from the original due date), although, it is easier to amend your taxes as soon as you identify a mistake or determine you would like to save.
Is this still sounding too difficult or time-consuming?
If filing a tax amendment is still sounding confusing, difficult, or time-consuming, let us help you! Our average customer saves $4,000 per year on taxes (with even larger savings due to covid relief.) We are more than happy to get on a call and talk about your situation, and how we can help!