Learning Center

We keep you up-to-date on the latest tax changes and news in the industry.

5 Reasons to Amend a Previously Filed Tax Return

The most recent data from the IRS on individual tax returns indicates that of 131 million returns filed, about 5 million were expected to be amended. This comes to less than 4 percent, but that projection still affects a significant number of taxpayers. Filing an amended tax return can be a hassle that you definitely want to avoid if possible. But there are some situations where you'll have to do so, and it's prudent to seek out the help of a tax advisor who can guide you through the process. Here's why you may need to file an amended tax return.

1. You made a math or data entry mistake and didn't realize it until after you submitted your tax return.

For example, you added up your charitable deductions, and after filing your return, you realize you added them up incorrectly, and the difference was sizeable. Filing an amended return can correct that math error and get a refund.

Perhaps you were entering your gross income from your self-employed business into your software while it was late and you were tired, and you inadvertently transposed the numbers and entered the gross income as $78,000 when it was really $87,000. You will need an amended return to correct that error.

However, you would not usually amend a return if you incorrectly entered W-2 income since the IRS receives a copy of the W-2 and will compare it with what you reported and if there was an error, they will automatically make a correction and send you a bill or a refund as the case might be. The IRS website instructs taxpayers not to amend a return in such a situation.

The statute of limitations for refunds is three years for the due date the tax return and if the IRS has not automatically made the correction and you have a refund coming don’t let the statute of limitations expire before filing an amended return. That holds true for any situation were an amended return will result in a refund.

2. You used an incorrect filing status.

Single parents, caregivers of elderly parents, and recently married or divorced people often make the mistake of using “Single” status when it's the wrong one. “Heads of Household” miss out on crucial tax benefits, while married people will generally need to use “Married Filing Separately” if they don't wish to file a joint return with their spouse. Because filing status affects so many elements of your tax return, you need to file an amended return to pay additional taxes you owe or receive a refund once the correct one is used.



3. You didn't realize that there was a tax benefit you qualified for, and you'd like to claim it now.

There are many frequently overlooked tax benefits a tax professional would be aware of that the average DIY person wouldn't, such as the ability for most individuals and small business owners to make pension and profit-sharing contributions in a new year before the tax-filing deadline and still have it count for the current filing season.

This also works in reverse in that people accidentally claim benefits they weren't actually entitled to. Often, the best way to know for sure is to consult a tax professional.

4. You had investing activities that affect your tax return.

Typically, you don't realize a capital gain or loss until you actually sell an asset. But if securities become worthless, this results in a capital loss that needs to be reported the year it was deemed worthless, and not the year you discovered the fact. If this security was deemed worthless a long time ago, you may have to amend prior year returns to account for the capital loss.

This can be significant since you are limited to deducting $3,000 in capital losses from all of your other income and result in capital loss carryovers that last several years. If you have any other investment losses that were forgotten or miscalculated on your original tax return, filing an amended return is the next logical stop to ensure your carryovers are done correctly for future tax returns.

5. You received tax forms after filing your tax return.

If you were due a W-2 or 1099 form, you might not receive it when you're initially preparing your taxes. It could be a surprise corrected form or the payer was just late sending it to you. But if you already filed your tax return, then got additional forms later on, amending your tax return becomes inevitable.

Amending your tax return can be a cumbersome process, especially if you're self-employed and/or have a great deal of investing activity. Asking a tax professional to assist you with filing amended returns can eliminate the headaches that come with the process. Many even offer a free review of self-prepared returns and ask the right questions to determine if it's worth it to amend this year's return and any prior years'. You may also have to amend your state tax return(s), which can grow more complex if your residency is or was multistate.


Share this article...

Want our best tax and accounting tips and insights delivered to your inbox?

Sign up for our newsletter.

I confirm this is a service inquiry and not an advertising message or solicitation. By clicking “Submit”, I acknowledge and agree to the creation of an account and to the and .

Benefits of having a business advisor

Your CFO, Reimagined as a Financial Doctor

Diagnosing root causes, prescribing solutions, and guiding your property business toward long-term wealth.

Our CFO | Advisor

Raquel is a passionate business owner. Now, she is returning to her grassroots with a twist - guiding clients with her expertise as a CPA, she can advise your company as your trusted CFO and Advisor.

  • Raquel Deodanes, MS, CPA

    Co-Founder

    CPA with Real-World Experience – I help property managers stay profitable, tax-efficient, and cash flow positive.
    Tax Strategist – Former advisor at California’s revenue agency.
    Trusted by 4,000+ Businesses – Experience across CA, FL, TX, NV, and beyond.
    Real Estate Investor – I understand the financial realities of property management.
    Entrepreneur – I’ve built businesses and know the challenges you face.

Frequently Asked Questions

We diagnose financial inefficiencies, treat problems like poor cash flow or rising costs, and guide you to long-term financial health. That includes cleaning up your books, forecasting cash flow, optimizing operations, and helping you grow your portfolio with confidence — just like a doctor builds a custom care plan for a patient.

Bookkeepers record transactions. CPAs file your taxes. We connect the dots — helping you understand your numbers, strategically improve them, and make smarter decisions throughout the year. We work alongside your existing team to drive performance, not just compliance.

If you're unsure where your cash is going, struggling with rising costs, planning to scale, or just tired of reacting instead of planning — now is the right time. We help you get ahead of problems, not just clean up after them.

Clients typically see improved cash flow, cleaner books, higher NOI, better financial reporting, and a lot less stress at tax time. More importantly, you gain clarity, confidence, and control over your business — and a partner who helps you grow it.

Pricing

Painless, transparent pricing.

Let us take away your stress and give you back your time. Choose your perfect package today.

Base

$499 /mo
  • Dedicated finance expert

  • Bookkeeping with accrual basis

  • Includes P&L, balance sheet, and cash flow statements

Core

$999 /mo
  • Includes everything in Base, PLUS

  • Industry KPIs and financial ratios

  • Monthly virtual 1-hr meetings

  • Monthly rolling budget forecasts

Growth

$1999 /mo
  • Includes everything in Base, CORE

  • Budget vs. actuals variance analysis and review

  • Payroll and HR Platform