filing extension help

[acctjo]

Client brought tax return in that she had filed personally with a tax service online. Return was wrong. I prepared an amended return for her. Then changes were made for the unemployment received. My understanding is IRS is going to fix these returns that were filed and issue credits to the tax payers. I have not had her send in the amended return yet. When we do send it in it will show the amounts as originally reported not any changes the IRS made.

I am looking for advice on when I should send it in and what figures do I use since IRS will change original amounts. We are looking at unemployment and child tax credits.

Thanks

[Just-Lisa-Now-]

Is the UI the only thing wrong? If so, dont amend, IRS will correct it themselves.

[BobKamman]

It sounds like it was wrong for other reasons, before UCE came along.  I would not count on IRS "automatically" figuring a refund on an amended return.  I would tell the client not to file the amended return, and offer to redo it for a reasonable fee.  It would help, though to know more details.  Was the amended return to reduce or increase a refund?  How many dollars are involved here anyway?  Is there also a problem with a state return?  

[acctjo]

no. She took  a large sum out of her retirement account to make ends meet and instead of extending it out over 3 years it was reported as a lump sum. Tax due was $11000.00 by extending it for 3 years he refund is over $2000. There are several small children on the account so CTC is also involved.

[acctjo]

no state return involved

[BobKamman]

Is that three-year election one that has to be done by the due date of the return? Maybe someone here knows.  I would file a completely-correct return now.  

[acctjo]

If I filed a new return it would be kicked back because the social numbers have already been used. Thinking I will send amended without any changes to the unemployment amounts and note that in the explanation area. Thanks for your help!

[BobKamman]

That would be a mistake.  How can you even think of signing a return that is wrong?

[acctjo]

Maybe there is a misunderstanding here. I cant file an original return using social security numbers that have already been used to file a  return. The return needs to be amended with the correct numbers. The IRS has said not to amend the unemployment amounts. 

How to handle this is what I originally asked for suggestions for. 

Thanks,

[BobKamman]

You can file a paper 1040-X, the sooner the better.  IRS is not speaking to your particular case and in fact they have admitted that some adjustments will have to be made on amended returns.  When they tell hundreds of thousands of people not to file an amended return, they are not telling them to avoid filing an amended return if there are other mistakes to correct.  If you want to wait till summer or later for them to make an attempt at your client's return, which will not fix the major problem with it, then do that.  

"Taxpayers may need to file an amended return if the tax break makes them newly eligible for additional federal credits and deductions that weren’t already included on the original tax return, the IRS said.

For example, the unemployment tax break may make some people newly eligible for the Earned Income Tax Credit. Taxpayers who didn’t claim the credit on their initial return must file an amended return to get it. They may want to review their state tax returns, as well, the IRS said."

https://www.cnbc.com/2021/03/31/10200-unemployment-tax-break-irs-refunds-will-start-in-may-.html

[acctjo]

Thank you. I was going to file the amended with the unemployment changes but was advised against it thus my wondering how to do it. I appreciate your feedback and indeed you were thinking along the same lines I was to begin with.

[RayNyc]

Hi Lisa. Do you please know why intuit proconnect preselects extensions and amendments, even before e-filing a client?

Thx., Ray

[Just-Lisa-Now-]

I dont understand what "preselects" means...are you checking the EF boxes on the fed info worksheet for the 4868 or 1040X ?

[RayNyc]

Hi Lisa. I created a file and typically I check under "Profile" (We use proconnect). Normally, software will pick federal and state for e-file, but this particular one checked some extensions and amendments, without me manually checking anything. That's why I wondered why that happened. Also, I don't have client's returns for 2019 at the moment, if that matters (I will have them soon)

[Just-Lisa-Now-]

Im sorry, I dont use ProConnect, I use ProSeries (totally different) I honestly dont know how it works.

[RayNyc]

no worries, thank you anyway