What do I do if I filled my return using itemized deduction and I need to amend to standard deduction?

[Mben]

I have already mailed the return (2 weeks ago). It's a past return (2017) and I've also paid (I owed because I used itemized deduction).

I'm pretty sure if I use the Standard deduction I will not owe but get a refund instead.

Will the IRS also return my money?

Thank you! 

[Anonymous]

why do you think you need or want to change? 

The IRS rule is written such that if one spouse itemizes, then the other spouse is not eligible for the standard deduction and must itemize or take no deduction. It's not applied the other way around as in, if one spouse takes the standard, then you must also take the standard. This means when you itemized the standard deduction was taken away from your spouse. So, whether that is something you want to do is your decision, but, in the end, you both must use the same method. IRS Publication 501

[xmasbaby0 · Accepted solution]

If you only mailed that 2017 return a couple of weeks ago, you need to wait until it has been fully processed, even if you do need to amend it.  Do NOT send in an amended return now.  The IRS has not been opening the mail--mailed returns have been piling up for several months.  They have only just begun to start opening a huge backlog of mailed in returns, so you can expect a long wait before they even process the return you mailed in.  If you mail in an amended return before that, it will just cause confusion and further delay.  You still have plenty of time to amend the return so hold off.

And...tell us why you itemized originally instead of using standard deduction.  The default is standard deduction unless you have enough itemized deductions to exceed you standard deduction.  So.....did you file married filing separately and itemize because you were required to?  Or did you "force" itemizing?  

And---did you use 2017 software for that return?  The current online software is only for a 2019 return.  That 2017 return should have been prepared using downloaded desktop software.  Is that what you used?

[Mben]

Hi @xmasbaby0 !

Thanks so much for answering and providing this info.

Yes, I used the desktop software to file 2017.

It was a misunderstanding. We thought that my husband itemized because he is self-employed (he also didn't understand this process) but we clarified things with the CPA that files his taxes (unfortunately after I have filled) and he clarified to us that my husband does not itemize, he takes standard deduction. We both thought that he itemizes because he deducts all his business expenses on schedule C. Like I said, it was a big misunderstanding from our part.

I will wait to do the correction, but how will I know the return has been processed? How long should I wait?

And, can I amend the return using the 2017 software I already have?

Do you know if the money I already sent (I paid through Official Payments) will be returned?

Again, thanks so much! I really appreciate your help!

[Critter]

I will wait to do the correction, but how will I know the return has been processed? How long should I wait?

Wait at least 6 months ... due to the Covid delay it will take at least that long to process a 2017 return.  Mailing in an amended return earlier could delay things further... the amended return usually takes 4 - 6 months to process all on it's own.   It is possible that your spouse will get an IRS letter requiring him to amend to itemize since you did ... if you get such a letter you can mail in your amended right away and he should respond that you are amending. 

And, can I amend the return using the 2017 software I already have?  

Yes you can ... you will need to print/mail the amended return in.

Do you know if the money I already sent (I paid through Official Payments) will be returned?

The money you already sent will not be returned.   However, on the amended return the amount you paid will be taken into consideration  and then if the change lowers the tax liability and excess paid will be refunded ...

Look at the form 1040X when it is completed …

Column A should have the figures from the original return, Column C the corrected figures and Column B the differences between the other 2 which needs an explanation on page 2 of the form 1040X.

If you completed it correctly you will see an entry on either line 16 OR 18:

On line 16 should be the amount you paid with your original return. 

On line 18 should be the amount of your original refund you received.

Then you will see your extra refund on line 22 OR  the new balance due you need to pay on line 20.

NOW .... my real question is why are you filing separately at all ???  It may be better if you file jointly ... so if you amend your return you may consider correcting your filing status as well.  I HIGHLY recommend you use the husband's CPA to make this correction as it is not an easy situation for a novice. 

[VolvoGirl]

One thing you probably understand now......

Don't confuse itemized deductions on schedule A with your business expenses/deductions on schedule C. They are separate. For Schedule A personal deductions, you get to take your itemized deductions or the standard deduction, whichever is larger.  Itemized deductions are things like Medical, Gifts to Charity, State Income Taxes Paid, Mortgage Interest, Property Taxes, Car Registration fees, etc.

You get to take both,  your business expenses AND the Standard Deduction (or your personal Itemized Deductions).  And you have to enter your business expenses.  Be aware, if you have self employment income you can get in trouble for not reporting all your expenses to qualify for the EIC.

But as critter asked.....why aren't you filing a Joint return? He doesn't have to file his business expenses separate from you.  Better discuss all that with the CPA.

Unless you have a specific reason to file separate returns,

It is usually better to file Joint. Joint has the lowest tax rates and the highest Standard Deduction.   And if you are in a Community Property state MFS gets tricky to figure out.  Here's some things to consider about filing separately……

In the first place you each have to file a separate return, so that's two returns.  And if you are using the Online version that means using 2 accounts and paying the fees twice.  

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong.  If one person itemizes deductions then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!  

And there are several credits you can't take when filing separately, like the

EITC Earned Income Tax Credit

Child Care Credit

Educational Deductions and Credits

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

See …….

https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-...

[BillM223]

As noted above, you are generally better off filing joint, not separately.

Did you e-file? Did your husband's CPA e-file his return? You both can't have done that if you filed Married Joint (one return or the other would have been rejected). Or maybe you filed married separate, which usually is not to your benefit (it could be but it's not easy for the average taxpayer to know when). Or worse, maybe you each filed as Single or Head of Household when you should not have.

Personally, while all the advice above is accurate and true, we don't know exactly what either one of you actually did. I would take your copy of your tax return and take it to your husband's CPA and ask him/her to straighten it out. Only by comparing the two return can he/she figure it out.