topic Re: Tax return mistake in Get your taxes done using TurboTax

Tax return mistake

shayanzahid — Thu, 18 Feb 2021 06:23:24 GMT

I accidentally filed my taxes before getting my 1099 from Robinhood, which had a gain of $20 (so looking at 12% tax that should be around 2-3 dollars). Is this tax small enough that I shouldn't worry about filing an amended return just because I owe an extra $2 to the IRS?

Re: Tax return mistake

JohnB5677 — Thu, 18 Feb 2021 15:55:45 GMT

The IRS gets a record of what you sold the investment for, but not what you paid for them. If there is a significant amount that you sold it for you can expect to get an tax notice in six to nine months.

It will assess a tax based on what you sold the stock for. It will then ask for details on the stocks and you can show the purchase cost there.

OR, you can file an amended return.

To amend a return

Some quick ground rules:

Be sure the original return was filed and accepted.
DO NOT go back into the return or change anything before you start the amendment process.
Gather everything you need before you start.
Complete the entire amendment process before you log out.
Starting with 2020 tax returns you can E-File a 1040-X amended tax return. All prior years must be printed and mailed.

You can correct a return that you've already filed and had accepted. Select the year that applies and use this guide to proceed.

Select your tax year for amending instructions:

For additional information please refer to How to Amend

The 1040X (Amended Return) tax form is scheduled to be available 03/25/2021.

Re: Tax return mistake

shayanzahid — Thu, 18 Feb 2021 16:31:34 GMT

The proceeds were about 54 dollars... does that count as ‘significant’? I’m still fine with responding to their notice, I’m just trying not to have to file a whole amended return for such a nominal amount. I’m in the 12% tax bracket.

Re: Tax return mistake

JohnW152 — Thu, 18 Feb 2021 16:59:01 GMT

Since there’s an increase in tax liability, the IRS would consider this significant.

Whether it’s worth your time to amend is up to you, but according to IRS Topic No. 308 Amended Returns, you’d need to amend:

If you discover an error after filing your return, you may need to amend your return…. do file an amended return if there's a change in your filing status, income, deductions, credits or tax liability.

Please see the TurboTax Help article How to amend (change or correct) a return you already filed for instruction on how to amend your previously-filed tax return.

Note that Form 1040X, Amended U.S. Individual Income Tax Return, has a tentative release date of March 25, 2021 in TurboTax.

You might also consider -- and this is from my personal experience -- amending a return in TurboTax for a single item is not a big deal, timewise. You'll probably be done in under 10 minutes.