Amending 2020 Tax Return Post IRS Acceptance and Issuance of Refund

[steinjd]

Hello,

I am going to start a new question thread because it seems the other thread I've been a part of has too much baggage and "experts" are answering questions that are not being asked and avoiding the question being asked in replies.  So, starting over.

Facts:

1.  I used TurboTax online to file a Married Filing Jointly 1040 for our 2020 taxes, the return was approved by the IRS, and we received our expected refund in early March 2021.

2.  After receiving our refund from the IRS, we realized that we could benefit more if we contributed to my wife's Traditional IRA.

3.  We are 100% positive that we are eligible to receive the tax benefits of such a Traditional IRA contribution.

4.  We contributed an amount to my wife's Traditional IRA in late March 2021.

5.  We want to file an amended return based on the additional amounts added to the Traditional IRA.

6.  We had unemployment income, but that is not in any way, shape, or form the basis of our amended return.

7.  Even though it is not the basis of our amended return, after we amend our return, we will be eligible for  the unemployment benefit created by the 2021 Recovery Act.

8.  We will NOT be eligible for the unemployment benefit created by the 2021 Recovery Act if we do not amend our 2020 tax return.

9.  The IRS through IR-2021-71 has clearly stated that we need to file an amended 2020 return because we have "other credits" that we did not originally claim (i.e., Traditional IRA credits) that will make us "newly eligible for additional federal credits and deductions"; therefore, the IRS will NOT automatically make any changes to our return.  (i.e., The IRS will do nothing to our non-amended 2020 tax return even though we have unemployment income because our non-amended 1040 AGI is over $150,000.)

10.  The IRS through its guidance (https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation) has provided clear instructions on how to calculate the new exclusion of up to $10,200 of unemployment compensation.

11.  The IRS has already worked with TurboTax to get them up to speed:  "The IRS has worked with the tax return preparation software industry to reflect these updates so people who choose to file electronically simply need to respond to the related questions when electronically preparing their tax returns."  See IRS-2021-71 (March 31, 2021). 

12.  The 1040X is available from the IRS at https://www.irs.gov/pub/irs-pdf/f1040x.pdf for 2020 returns that need to be amended.

13.  TurboTax online software is not allowing me to file an amended return for our 2020 taxes. (i.e., the software tells me that: "Your return isn't ready to be amended yet.  The IRS is making some updates that change how we support amended returns that include unemployment.  We'll be updating our product after we have IRS guidance on the best way to file amended returns so they can be processed quickly and accurately.")

14.  The IRS has provided perfectly easy to interpret guidance to allow TurboTax to do its job.  Clearly, the IRS is not "making" updates, rather, the IRS has already made updates and TurboTax has not yet incorporated those updates that we, the customers, are waiting for TurboTax to incorporate.

Question 1:  When will TurboTax update their online software so that I can amend my family's 2020 tax return?   

Question 2:  Would it be faster for me to file my amended return documentation directly to the IRS without the help of TurboTax?

Respectfully

[AnnetteB6]

It is understandable that you want to get your amended return taken care of as soon as possible.  However, due to the many changes in the tax laws that have been passed recently, the TurboTax program is still being updated.  To avoid having users submit unnecessary amended returns, the decision was made to suspend the amending process temporarily.  According to the information in the article below, the advice is to try to amend again after next week.  

In the meantime, you can click the link in the article to register your email address so that you will be notified when you can come back and amend your return.

Why can't I amend my return?

As for your question about whether it would be faster to amend your return directly without going through TurboTax, the answer would depend on how proficient you are with creating and filing a tax return and amended return.  Most general users would prefer the help of TurboTax.  

[PayPerPeddler]

This is the EXACT same boat I am in.  We will be $13 over $150,000 after the IRS does the calculations for us.  We contributed a little more money to my wife's IRA.  Just waiting to amend so we can unlock these other credits.  If we did not amend, we would be over $160,000.  So this should activate the 3rd stimulus money for us as well.  Do you expect the same?

[DianeW777]

It appears you are on the right track to activate the third stimulus payment by changing your IRA contribution.

You should start you amendment so that it's ready to go when it can be e-filed.  This will be the most expedient method for the amendment changes. As a reminder you should make sure you are on the email list so that you know when the amended return can be completed and filed.

• Why can't I amend my return?

@PayPerPeddler  

[PayPerPeddler]

Thank you, but I cannot even get to the point of preparing an efile.  It says I am not able to amend yet.

[JotikaT2]

Please see the link below for more details and to sign up to be notified once the amended return is available.

Amended return notification sign up

@PayPerPeddler

[bblawsn]

That is incorrect. You can amend on Turbo Tax programs CD's bought, they have been updated it look like it is only the Free Turbo Tax sites.  Also, all other sites amended returns are up and running, what is wrong with the programmers for turbo tax e free site.  This years turbo tax program is not the best

[fanfare]

Always print a copy of your completed tax return for your records, and review it carefully before e-Filing.
You will need it if you are audited by the IRS, or to amend if a TurboTax update changes your return or for any other reason,
SUCH AS, you decide to make an IRA contribution.
AND, to find your original AGI next year.

The way TurboTax is set up most users don't do that.

If you come back and find that an update  has changed your tax return,

you are out of luck.

The original return is gone and there is no way to get it back other than to request a transcript from IRS.

The number of users who will be unable to e-File next year because their original AGI and the AGI in the return do not match will be huge.

[PayPerPeddler]

Are you saying that I cannot amend online right now because of the whole unemployment issue, but I could if I go buy the CD?  Also, will my info pull up on CD as easy as it does online?  Will I be able to amend if I go and buy the CD?

[bblawsn]

no, it will not pull over from the free site to the cd, I tried to do the same thing.  I was helping someone else that bought the CD and  efile their return on the Turbo Tax CD.

We were able to amend the return and submit it  using the Turbo Tax CD.  So why isn't the online site updated?

[PayPerPeddler]

You couldn’t upload your return to the CD/Downloaded version even if it was on your computer saved?  Did you have to enter everything all over again?

[bblawsn]

 If you bought the CD and did your taxes on it, when they tell you to update the cd, when we did the updates it  changed their refund amount or amount owed. the unemployment updated  and all other changes updated at that time on the CD.  

[PayPerPeddler]

I just want to let you know that I downloaded the TurboTax Desktop Edition and it worked!  I was able to amend with everything included.  I am wondering if now that I am eligible for the third stimulus, will I actually get it?  Am I considered a "Plus Up" candidate?  I do not expect you to know that...but maybe someone will.  Thank you very much and have a wonderful day. 

[AmyC]

@PayPerPeddler Do not file an amended return until the original is settled. For the 1095-A, the IRS will send a letter stating not to amend, just send them the 8962 and a copy of the 1095-A. 

After the original is settled, then you can file your amended return to qualify for the stimulus. It will also be available on next year's return, if you qualify.

[PayPerPeddler]

Hey @steinjd , a while ago you posted this and I let you know I was in the exact same boat as you.   I learned from somebody on here that if you buy the downloaded version ($80), you can amend your return from there!  You have to download your original tax return in the ".tax file" form.  It should be pretty easy at that point.  I know it sucks to pay $80, but for me the tax refund I should be getting makes it worth it.  Let me know if you have any questions.