Amending Your Tax Return

5 Good Reasons to Amend Your Tax Return — and How

By: Reyna Gobel Published: December 21, 2012
Missed tax deduction? Overlooked tax credit? Get what’s coming to you by amending your return. 1. Home office deduction If your home is your principal place of business, you can deduct a percentage of eligiblehome expenses like:
  • Utilities
  • Mortgage interest for the proportion of the house used as your office
  • Home repairs and maintenance
Forms you’ll need to file an amendment:
  • 1040X
  • Form 8829 and Schedule A (if you’re employed by someone else) for the year you’re amending
  • Schedule C (if you’re self-employed) for the year you’re amending
2. Energy tax credit If you installed energy-efficiency improvements (like HVAC systems, insulation, a roof, windows) in 2009 and 2010 and didn’t take a tax credit for those upgrades, you may have missed out on up to $1,500 (or up to 30% of what you spent). My husband and I didn’t claim the energy tax credit for insulation we installed in 2009 because we thought we’d get a better deal if we claimed the credit in 2010 when we planned to replace windows. But we never got around to replacing the windows. So we amended our 2009 return to claim the tax credit for the insulation. The $500 we’ll get back for the insulation is less than the $1,500 we would have received if we replaced windows, but it’s $500 we won’t get if we don’t amend. If you want to amend your 2009 return that you filed in 2010, you have until April 15, 2013; for your 2010 return, you have until 2014. Forms you need:
  • 1040X
  • Form 5695 for the year you’re amending
Note: Congress extended the $500 lifetime energy tax credit for 2012 and 2013. 3. Home improvement sales tax deduction If your state and local town doesn’t tax income, you can amend Schedule A to deduct state and local sales tax you paid. Say you added new siding for $10,000 and your state charged 6% in sales tax. That’s potentially a $600 deduction. Use the IRS’s online sales tax calculator to figure out the total sales tax you can deduct. Have the receipts to prove you paid the sales taxes. Forms you need:
  • 1040x
  • Schedule A for the year you’re amending
4. Property tax deduction Get a copy of your tax bill payment from the local tax office that collects the bill. Make sure you deduct the property tax expense on your amended return for the year you paid it, which could be different than the year it was due. Forms you need:
  • 1040x
  • Schedule A for the year you’re amending
5. Home repair deduction Red alert: You can’t claim deductions for any old home repair. There are only two narrow, possible ways to claim home repairs, and it’s always best to check with a tax pro for your particular situation: 1. If part of your home is used for business. You can only claim repairs made to your home office or claim a percentage of the repairs you make to the house as a whole, like repainting or patching a roof leak. If 10% of your home is office, you can deduct 10% of the repainting or patching. If the repair is to the office itself only, then the percentage generally does not apply. Forms you need:
  • 1040X
  • Form 8829 and Schedule A (if you’re employed by someone else) for the year you’re amending
  • Schedule C (if you’re self-employed) for the year you’re amending
2. For casualty losses. Calculating and deducting casualty losses (disaster, damages, robbery) is complex. Everything from your income level to how you value your property can affect overlooked deductions. Besides placing a value on your personal property, you have to subtract a number of things from that, including insurance reimbursement and a percentage of your adjusted gross income. Read IRS Publication 547 and consult a tax adviser. Note that you can claim losses from federally declared disasters either in the year they occur or, if it’s more favorable, on the preceding year’s taxes. Forms you need:
  • 1040X
  • Form 4684 for casualty and theft for the year you’re amending
  • Schedule A for the year you’re amending
This article provides general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice.

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