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Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 4:45 pm
by WhiskeyJ
I forgot to include home property taxes ($6500) on my 2012 tax return, using turbotax. It doesn't affect my acutal federal return because I'm in AMT. It does impact my state return by $300 (4.6% - Colorado).

I'm trying to decide whether it's worth the hassle for $300. Can I only amend the state return or do I need to also amend the federal return? A tax advisor friend told me a few years ago that amended returns in your favor increase audit risk. I'm pretty confident I have nothing to fear from an audit but for $300 I'm thinking it's not worth the extra attention. Any opinions?

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 4:52 pm
by jebmke
If the Federal return doesn't change, you can amend only the state. For $300 I sure would. Amended returns aren't difficult and I wouldn't worry about audit risk if your return is accurate.

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 4:58 pm
by Flobes
Two years ago, I amended two years of Colorado returns on the state's website. I did not amend federal return.

It takes just minutes. A few weeks later, the money was in my checking account. Colorado makes life very easy, indeed!

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 5:19 pm
by jackholloway
I would definitely do it for $300. Having overpaid the state for $300 this time will not be considered an offset if they find something they do not like in the future, so you might as well have accurate forms and refunds.

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 7:21 pm
by J295
Yes; then for the next 15 pizzas we eat I'd say to myself I love "free" pizza!

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 8:36 pm
by Calm Man
I will be hung for this. I always maintain the same position. Unless it is large either way (owe or get) I don't. I don't need it looked at again. OK, I am the only one.

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 8:48 pm
by nisiprius
For $300, I would. Amended returns are not too difficult. I don't think I'd say it takes "a few minutes," but maybe a couple of hours at worst--the time I filed an amended state return, the thing that took the time was that the software package, for some reason, did not include the amended return form for the state, and the one I downloaded from the state was just a plain PDF that didn't have any provision for entering numbers in it electronically, and it couldn't be e-filed so I had to find the envelope and the stamp etc.

For $20, I wouldn't. For $300, I absolutely would. I actually agree with Calm Man but I guess $300 to me does qualify as "large."

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 9:00 pm
by jebmke
Calm Man wrote:I will be hung for this. I always maintain the same position. Unless it is large either way (owe or get) I don't. I don't need it looked at again. OK, I am the only one.
In the case cited by the OP, the most likely case is nobody would ask a question. If they did, the likely request would be to provide documentation for all your Schedule A deductions which you have, right?

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 9:23 pm
by LadyGeek
WhiskeyJ wrote:I forgot to include home property taxes ($6500) on my 2012 tax return, using turbotax. It doesn't affect my acutal federal return because I'm in AMT. It does impact my state return by $300 (4.6% - Colorado).

I'm trying to decide whether it's worth the hassle for $300. Can I only amend the state return or do I need to also amend the federal return? A tax advisor friend told me a few years ago that amended returns in your favor increase audit risk. I'm pretty confident I have nothing to fear from an audit but for $300 I'm thinking it's not worth the extra attention. Any opinions?
The answer is easy- amend both federal and state returns. Take a look at the line above your signature, from Form 1040, U.S. Individual Income Tax Return (PDF):
IRS wrote:Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Your return is no longer accurate. I assume your state return has a similar statement.

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 9:27 pm
by LadyGeek
Let's assume the OP wants to do the right thing. Further discussions of whether or not it's "worthwhile" is off-topic as it suggests dishonest behavior - which is not acceptable on this forum.

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 9:27 pm
by sscritic
I filed an amended federal return for $50. I also fill out the forms that I need to to get a $50 gift card for signing up for this or that. Fifty bucks is fifty bucks. Now if my arithmetic doesn't fail me, 300 bucks is SIX times as much as 50 bucks. I would fill out six forms for 300 bucks (if I am being internally consistent, or is there some marginal utility thing where I would only fill out five forms for 300 bucks even if I would fill out one form for 50 bucks?).

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 9:32 pm
by Flobes
The Colorado process for amending a return (aka filing a 104X) is very simple, and It is best accomplished on the state's Department of Revenue site:
Correcting a Return
If you filed your Individual Income Tax Return (104), but later received additional information or found a mistake, you must file a corrected return using the Individual Amended Return (104X). The 104X can be filed electronically through Revenue Online, which will automatically pre-populate certain fields with information from your 104 form. Revenue Online is the preferred method for correcting your return.
The instructions for 104X are clear. The process is easy. Third-party software is not required. It really did take mere minutes to file two of them (in 2012, for 2010 and 2011).

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 9:34 pm
by sscritic
LadyGeek wrote: The answer is easy- amend both federal and state returns. Take a look at the line above your signature, from Form 1040, U.S. Individual Income Tax Return (PDF):
IRS wrote:Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Your return is no longer accurate. I assume your state return has a similar statement.
If you like that line, you will love the line on the 1040X.
Under penalties of perjury, I declare that I have filed an original return and that I have examined this amended return, including accompanying schedules and statements, and to the best of my knowledge and belief, this amended return is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information about which the preparer has any knowledge.
I like the including instead of the and and of course the extra comma for the parenthetical. Just because it is an amended return doesn't mean you don't have to "swear" to its accuracy. Note that you don't even have to read your original return again, you just have to examine the amended return.

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 9:34 pm
by HueyLD
............

Re: Would you file a state tax return amendment for $300?

Posted: Sat Feb 22, 2014 9:44 pm
by ajcp
LadyGeek wrote:
WhiskeyJ wrote:I forgot to include home property taxes ($6500) on my 2012 tax return, using turbotax. It doesn't affect my acutal federal return because I'm in AMT. It does impact my state return by $300 (4.6% - Colorado).

I'm trying to decide whether it's worth the hassle for $300. Can I only amend the state return or do I need to also amend the federal return? A tax advisor friend told me a few years ago that amended returns in your favor increase audit risk. I'm pretty confident I have nothing to fear from an audit but for $300 I'm thinking it's not worth the extra attention. Any opinions?
The answer is easy- amend both federal and state returns. Take a look at the line above your signature, from Form 1040, U.S. Individual Income Tax Return (PDF):
IRS wrote:Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Your return is no longer accurate. I assume your state return has a similar statement.
Is that really applicable? Leaving off income would make it inaccurate, but you don't have to take a deduction, it's optional, right?

Re: Would you file a state tax return amendment for $300?

Posted: Sun Feb 23, 2014 12:29 am
by jared
ajcp wrote:
LadyGeek wrote:
WhiskeyJ wrote:I forgot to include home property taxes ($6500) on my 2012 tax return, using turbotax. It doesn't affect my acutal federal return because I'm in AMT. It does impact my state return by $300 (4.6% - Colorado).

I'm trying to decide whether it's worth the hassle for $300. Can I only amend the state return or do I need to also amend the federal return? A tax advisor friend told me a few years ago that amended returns in your favor increase audit risk. I'm pretty confident I have nothing to fear from an audit but for $300 I'm thinking it's not worth the extra attention. Any opinions?
The answer is easy- amend both federal and state returns. Take a look at the line above your signature, from Form 1040, U.S. Individual Income Tax Return (PDF):
IRS wrote:Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Your return is no longer accurate. I assume your state return has a similar statement.
Is that really applicable? Leaving off income would make it inaccurate, but you don't have to take a deduction, it's optional, right?
No, I don't believe this is applicable. In most cases, I don't think choosing to forego a deduction makes the return inaccurate.

Re: Would you file a state tax return amendment for $300?

Posted: Sun Feb 23, 2014 12:34 am
by WhiskeyJ
ajcp wrote:
LadyGeek wrote:
WhiskeyJ wrote:I forgot to include home property taxes ($6500) on my 2012 tax return, using turbotax. It doesn't affect my acutal federal return because I'm in AMT. It does impact my state return by $300 (4.6% - Colorado).

I'm trying to decide whether it's worth the hassle for $300. Can I only amend the state return or do I need to also amend the federal return? A tax advisor friend told me a few years ago that amended returns in your favor increase audit risk. I'm pretty confident I have nothing to fear from an audit but for $300 I'm thinking it's not worth the extra attention. Any opinions?
The answer is easy- amend both federal and state returns. Take a look at the line above your signature, from Form 1040, U.S. Individual Income Tax Return (PDF):
IRS wrote:Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Your return is no longer accurate. I assume your state return has a similar statement.
Is that really applicable? Leaving off income would make it inaccurate, but you don't have to take a deduction, it's optional, right?
That's confusing to me too. If you intentionally ignore or leave off a property tax payment causing a smaller deduction is that really perjury?

Re: Would you file a state tax return amendment for $300?

Posted: Sun Feb 23, 2014 12:41 am
by DSInvestor
I would itemize to get $300 back.

Property tax is an itemized deduction. Here's what IRS says about "Should I itemize?"
http://www.irs.gov/taxtopics/tc501.html
Topic 501 - Should I Itemize?

Generally, you must decide whether to itemize deductions or to use the standard deduction. The standard deduction is a dollar amount that reduces the amount of income on which you are taxed. You should itemize deductions if your allowable itemized deductions are greater than your standard deduction. Some taxpayers must itemize deductions because they cannot use the standard deduction.

You cannot use the standard deduction if:

You are married filing as married filing separately, and your spouse itemizes deductions,
You are filing a tax return for a period of less than 12 months because of a change in your annual accounting method, or
You are a nonresident alien or a dual-status alien during the year. (If you are a nonresident alien who is married to a U.S. citizen or resident at the end of the year, you can choose to be treated as a U.S. resident. If you make this choice, you can take the standard deduction. For additional information, refer to Publication 519, U.S. Tax Guide for Aliens).
Some taxpayers cannot take the standard deduction and must itemize. If OP is in such a position where standard deduction is not an option, he/she must itemize. If itemizing, the itemized deductions should be accurate on both fed and state returns. If OP is eligible to take the standard deduction, that is an option even if the tax burden will be higher than itemizing.

Re: Would you file a state tax return amendment for $300?

Posted: Sun Feb 23, 2014 12:50 am
by sscritic
WhiskeyJ wrote: That's confusing to me too. If you intentionally ignore or leave off a property tax payment causing a smaller deduction is that really perjury?
The perjury would involve the word complete. If you leave out a deduction that you could take but take other deductions, is your return complete?
true, correct, and complete
I am not sure, as I do not list any medical expenses because I know they won't reach the floor required to get a deduction. However, in this case, I am taking the maximum deduction I can, $0.00.

Re: Would you file a state tax return amendment for $300?

Posted: Sun Feb 23, 2014 3:12 am
by jared
sscritic wrote:
WhiskeyJ wrote: That's confusing to me too. If you intentionally ignore or leave off a property tax payment causing a smaller deduction is that really perjury?
The perjury would involve the word complete. If you leave out a deduction that you could take but take other deductions, is your return complete?
true, correct, and complete
I am not sure, as I do not list any medical expenses because I know they won't reach the floor required to get a deduction. However, in this case, I am taking the maximum deduction I can, $0.00.
Here's some reading material for you and anyone else interested:
James Edward Maule. "No Thanks, Uncle Sam, You Can Keep Your Tax Break" Villanova University Legal Working Paper Series (2006). http://law.bepress.com/cgi/viewcontent. ... path_info=

Re: Would you file a state tax return amendment for $300?

Posted: Sun Feb 23, 2014 6:52 am
by Billionaire
I would definitely amend the state (for the refund) and probably also the federal. My thinking is primarily to show consistency from year to year.