I am not sure why just changing the name on the W-2 would change the amount of refund on your tax return. The return would total up the W-2s and report a total. If none of the amounts are changed, there would be no need for an amendment. When you say "I tried correcting it to my name today using TurboTax 2020 just to see what is going to happen and I see that we were supposed to get a better refund if I would have done it correctly." Did you change the numbers on the W-2?
To answer your questions:
- To correct a return you would have to file an amended return. However, the name change on a W-2 would not warrant an amendment. The reason I say this is because the Amendment has three columns. The first column is original numbers from the tax return (AGI, Deduction, Taxable Income, Tax, Payments/Credits). The second column will show the changes made in the return. If the AGI was adjusted it will either show a negative or positive number. Any numbers that were changed in the return will show in this column. The third column shows the net result of the changes and determines the end result of the amendment.
- No, the IRS does not charge a penalty for a mistake. However, if the result of the amendment is that you owe money to the IRS, there may be a penalty assessed. How much, is unknown. It all depends on how the IRS looks at it and whether the taxpayer catches it or the IRS catches it.
- Since it is for the tax year 2020, if there is an additional refund as a result of the amended return, yes you would get the refund. If the tax return is more than 3 years from the due date, then no you would not get the refund.
If you decide to prepare an amended return, if there is no change in the return, to do file it. There is no need to file it.
