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How To Get A $1,000 Refund By Filing An Amended Tax Return
By Wayne M. Davies
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Tax Tidbits: Presented by Wayne M. Davies of
www.YouSaveOnTaxes.com.
Short but sweet tax nuggets for the Small Biz Owner and/or
Self-Employed Person, each morsel serving up a specific tax
reduction strategy guaranteed to tickle your monetary taste-buds.
The U.S. Tax Code is so big, there's only one way to digest it:
one little nibble at a time.
Just like a piece of candy, one small bite of tax knowledge can
give you one very delicious deduction!
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Tax Tidbit #2: How To Get A $1,000 Refund By Filing An Amended
Tax Return
-- by Wayne M. Davies
Copyright 2003 Wayne M. Davies Inc.
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Aren't you glad another Tax Season is over?
Ah, yes -- another tax return filed, another tax return "in the
books."
Well, I've got a pleasant surprise for you.
Did you know you can actually get a refund for a return that you
already filed?
Yep, it's true.
If you think you forgot a deduction on a previously filed
return, you have three years to tell the IRS about it and
receive a refund.
Here's how it works: You can file an amended return up to three
years after the due date of the return in question.
So, for Year 2002 returns due April 15, 2003 -- you have until
April 15, 2006 to file a correction.
For Year 2001 returns due April 15, 2002 -- you have until April
15, 2005 to file a correction.
And for Year 2000 returns due April 15, 2001 -- you have until
April 15, 2004 to file a correction.
Now the question becomes: Is it worth it? I mean, do you really
want to spend the time and energy doing tax paperwork -- and
it's not even Tax Season!
I know, I know -- you've got better things to do with your time.
So here's an incentive to make it worth your time: If I offered
you a little part-time job that paid about $140 per hour, would
you be interested? I think so.
Well, that's how you should look at the task of filing an
amended tax return. Do the math:
You discover $1,000 of unreported deductions on your return from
Year 2000, 2001 or 2002. So you do the research, prepare the
proper forms (or have your accountant do it), and send them off
to the IRS.
If you are in the 35% tax bracket (say, 30% federal plus 5%
state), you will get a $350 refund for your efforts. And even if
it took you 2.5 hours of paperwork drudgery, Uncle Same just
paid you a cool $140/hour. Not bad, eh?
To file an amended federal income tax return, here are the links
to the necessary forms:
Form 1040X -- in pdf format:
http://www.irs.gov/pub/irs-pdf/f1040x.pdf
Form 1040X -- in "fill-in" pdf format:
http://www.irs.gov/pub/irs-fill/f1040x.pdf
IRS instructions for Form 1040X:
http://www.irs.gov/pub/irs-pdf/i1040x.pdf
You should also file an amended state return (assuming your
state has an income tax). For a link to a database of all state
income tax forms, check out:
http://taxes.yahoo.com/stateforms.html
Don't forget: if you're able to find $1,000 worth of unreported
deductions on one previously filed return (resulting in tax
savings of $350), there's a good chance the same situation
exists for the other 2 "open" years.
End result: $350 x 3 = $1,050 in total tax savings . . .
. . .Hmm, mmm, good! Now that's a tasty little morsel!
About the author:
Wayne M. Davies is author of the new eBook, "The Tax Reduction
Toolkit: 29 Little-Known Legal Loopholes That Will Reduce Your
Taxes By Thousands (For Small Business Owners and Self-Employed
People Only!) Don't file another tax return until you visit:
http://www.YouSaveOnTaxes.com/toolkit.html
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