Prior year filed Single but should be MFS

[ea_rva aka acctgtaxmatters]

Hello!

New client who is happily married - she and her husband prefer filing separate...I am filing 2023 + 2024 as MFS.

The 2022 return she filed shows filing status of Single. In speaking with her, she has always filed MFS and was not aware/did not notice the 2022 status = Single. Just had new preparer in 2022 who missed it.

She does benefit by filing Single due to additional medicare tax thresholds being $200,000 for Single vs. $125,000 for MFS.

She would owe an additional $500 for 2022 had she filed MFS.

Should I amend or wait to see if IRS catches it?

Thanks in advance!

[IRonMaN]

"Should I amend or wait to see if IRS catches it?"

The IRS doesn't check marriage records as of 12/31, so they aren't going to catch it.  Since you know the return is wrong, you should inform the client that an amended return should be filed.

[jeffmcpa2010 · Accepted solution]

I believe you have an obligation to inform the client of the error.

It is the client's choice whether to correct the error or not.

[ea_rva aka acctgtaxmatters]

I have notified her - she is deferring to my recommendation which is to amend but wanted input before I did.

[Just-Lisa-Now-]

How much $$$ are we talking about? 

Id let her know that it 'should be' amended, and this is what the $$ difference would be, and they'll end up hitting her for interest as well.  Its her choice whether to amend or not.  

How much longer till the SOL is up for 2022...another 6 months or so?  If they haven't caught it yet, I doubt they ever will.

[BobKamman]

Why are you recommending that she amend?  As far as I know, IRS doesn't pay you a finder's fee.  There is zero chance IRS will make an issue of this, unless someone reports her, and even then it's a waste of time for them to do $500 audits.  Did her husband file correctly, and show her SSN on his return?  So they already have evidence that she's married, if they want to pursue her.  

How closely did you look for other errors that the prepare made, that might have cost her $500?