Monthly Archives: January 2013

When to File an Amended Return


Filing an amended tax return can be done in several easy steps.

Filing an amended tax return can be done in several easy steps.

Westchester tax preparers at Herman & Company CPA’s have all the answers to your personal finance questions!

Oops! You discovered an error after filing your tax return. Should you file an amended return? The answer depends on the type of error. The IRS usually corrects mathematical errors or requests missing forms (such as W-2s) or schedules. In these cases, do not amend your return.

File an amended return if any of the following were reported incorrectly:

  • Your filing status
  • Your total income
  • Your deductions or credits

Use Form 1040X (Amended U.S. Individual Income Tax Return), clearly identifying the year of the return that your are amending at the top of the form, to correct a paper or electronically filed Form 1040, 1040A, or 1040EZ. A separate 1040X is required for each year that you are amending and each form must be mailed in a separate envelope to the IRS processing center for your state. Addresses for the centers can be found in the 1040X instructions.

Form 1040X has three columns: Column A for original or adjusted figures from the filed return; Column C for corrected figures; Column B to show the difference between the figures in Columns A and C. Explain the items that you are changing on the back of the form. If the changes involve another schedule or form, attach it to the 1040X. For example, if you are filing a 1040X because you have a qualifying child and want to claim the Earned Income Tax Credit, you must complete and attach a Schedule EIC to the amended return.

If you are filing to claim an additional refund, wait until receive the refund from your original form before filing Form 1040X. If you owe additional tax for the prior year, Form 1040X must have been filed and the tax paid by April 15th of this year to avoid any penalty and interest charges.

Generally, you must file Form 1040X to claim a refund within three years from the date that you filed your original return, or within two years from the date that you paid the tax, whichever is later. Please contact our Westchester tax preparation firm for more information on amending a tax return.

Deductible Home Offices

Your home office Westchester CPA firm

Your home office can be used as a tax deduction.

Westchester tax preparers at Herman & Company CPA’s have all the answers to your personal finance questions!

Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

If you are an employee, you have additional requirements to meet. You cannot take the home office deduction unless the business use of your home is for the convenience of your employer. Also, you cannot take deductions for space you are renting to your employer.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses.

Your tax preparation at Herman & Company CPA’s is just a phone call away! If you seek a top Westchester CPA firm, we are there to help.

Deducting Mortgage Interest

Westchester tax preparers at Herman and Company CPA’s have all the answers to your personal finance questions!

If you own a home, you can claim a deduction for the interest paid. To be deductible, the interest you pay must be on a loan secured by your main home or a second home. The loan can be a first or second mortgage, a home improvement loan, or a home equity loan. To be deductible, the loan must be secured by your home but the proceeds can be used for other than home improvements. You can refinance and use the proceeds to pay off credit card debt, go on vacation or buy a car and the interest will remain deductible. There are other financial reasons for not wanting to do this but it will not disqualify the deduction.

The interest deduction from your home equity loan is not unlimited. You can generally deduct interest you pay on the first $100,000 of a home equity loan. After that, it depends. If the home equity loan was used to improve your first or second home, or to purchase a second home, you can probably take the deduction on an amount up to $1 million or the value of the home

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.