Confused 401k with Traditional IRA

[atlantalady123]

Hello,

I just filed my taxes and realized I made an error. I confused my 401k as a traditional IRA. In other words, I claimed my 401k contribution as a Traditional IRA contribution.

I have a 401k and a ROTH IRA, but not a traditional IRA. I did correctly report my contributions to my Roth IRA.

Do I have to file an amendment right now or should I wait for the IRS to get back to me? I did not contribute more than the allotted amount (in my case $6,000). I do not think it impacted my return amount, but obviously want to do everything correctly! Thank you for your help!

[KathrynG3 · Accepted solution]

It depends, but I do recommend correcting for accuracy. The contributions, unlike distributions, would not have a tax impact. It is a best practice to file an amendment as soon as an error is realized, but it is best to wait until the original return has been accepted. 

Once the return has been accepted, typically 24-48 hours after submitting, then you can proceed.

• If the return is rejected, you can correct it without amending. Click the link: How do I fix a rejected return?
• If the return is accepted, then you can begin the amendment process. This is submitted through the mail. I recommend sending it certified mail for your records.
  • How do I amend (change or correct) a return that has already been accepted?

@atlantalady123

[fanfare]

your return will not be rejected or corrected by the IRS.

You should make a printout now of the return as you originally filed and mark all pages ORIGINAL.

You will need it to prepare Form 1040X.

The only reason to wait is to see if the IRS makes changes on your return for other errors you may have submitted.

[macuser_22]

You need to amend.  It might take a year or longer for the IRS to catch it and there could be tax, interest and penalties.

What makes you think that it did not affect your tax?  If entered as a Traditional IRA contribution then it probably lowered the tax or increased your refund unless you specified that it was not deductible, in which case a 8606 form would have been included that will affect future distributions.   Either way it needs to be fixed, by removing it on an amended return.

You should *wait* until your return has been processed and you receive your refund or conformation that any tax due has been paid. (If you file an amended return while you first return is being processed it can cause extended delays for both returns if two returns are in the system at the same time). In addition, if the IRS makes any change on your original return, you might end up having to amend the amendment – a sticky process that can take a year or more).

-- Then you can start the amend process.

-- Amended returns can only be mailed - allow 8-12 weeks - can take up to 16 weeks (4 months) for processing.

See this TurboTax FAQ for help with amending:

https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed

You can check the status of your amended return here but allow 3 weeks after filing for it to show up:
https://www.irs.gov/filing/wheres-my-amended-return

[atlantalady123]

Thank you @KathrynG3 ! Do I have to send anything along with the 1040-X? Like should I also be sending the IRA Contribution and deduction worksheet or are those just for my personal use? I apologize if this is a silly question, I am very new to filing my own taxes. 

[KathrynG3]

You're welcome! 

Yes, and TurboTax will cover everything you need to send. 

No, you do not need to send the worksheets--you are exactly right, they are for your personal use.

We are happy to help! 

@atlantalady123

[macuser_22]

Worksheets are not sent to the IRS.  Just send the 1040X and any form that changed.  If all you did is remove the incorrect Traditional IRA contribution the  that would be a corrected 8606 form if you did not originally deduct the contribution or a corrected Schedule 1 of you deducted it.

[fanfare]

"Yes, and TurboTax will cover everything you need to send. "

Unfortunately, not very well.

TurboTax won't tell you what forms are new or changed due to your amendment.

This you have to figure out for yourself.

That's why you need a copy of the return as originally filed.