Does filing a 1040x (amended return) increase your chances of being audited?

July 16, 2011 4:24 PM

Does filing a 1040x (amended return) increase your chances of being audited?

I recently used a program to do my taxes for the first time in 2010. It mistakenly only uploaded one of my two brokerage accounts (I like to blame the program, could've been my mistake) for my return. Also, I got a 1099 very late and it was not included. So long story short on my first efiled return (using program) I showed a capital gain overall and did not have the 1099 listed. My correct return should show a capital loss and the 1099 as income. When it is all figured out I think I owe less than 100 dollars. So here is the question, should I file a 1040x with all of the correct information or is that just likely to trigger a full audit? Have you every had experience with a 1040x? What would you do? I am currently planning on sending it in with a brief explanation letter, but wanted to see what the metafilter community thought. Thank you for your time. Have a great night!

posted by gibbsjd77 to work & money (10 answers total)

I've filed 1040x twice due to forgotten 1099-MISC. There is certainly no need for an explanation letter; it happens all the time. Since it's after the tax filing deadline, you might expect to pay some late fees and interest on those $100.

Two friends of mine have been audited for – intentionally or not – leaving out 1099-MISC income (less than $1,000; their W2 earnings were less than $35-40,000 a year), and the fines and interest were much steeper that way.
posted by halogen at 4:37 PM on July 16, 2011

Did you get any further scrutiny due to filing the 1040x or was it pretty simple?
posted by gibbsjd77 at 4:43 PM on July 16, 2011

I don't have anything to hide. I'd just like to avoid the hassle of an audit if at all possible.
posted by gibbsjd77 at 5:06 PM on July 16, 2011

I did a 1040X for 2009 and just included the explanation in the box on the form. I didn't get audited (or scrutinized in any other way that I'm aware of) and wouldn't expect to for a simple, honest mistake like mine or the one you're talking about.

I would definitely do the 1040X and only explain in the box, not with an additional letter. Correcting your mistakes is probably a good thing in the eyes of the IRS, not something that would trigger an audit in and of itself.
posted by dayintoday at 5:18 PM on July 16, 2011

We filled out a 1040x this year for a substantial increase to our return, based on new data, and I thought it may raise some eyebrows. But we received the additional return in a few weeks, with no questions asked, when the estimate given was 8-12 weeks for an amended return. I'm not sure that this answers whether it is likely to trigger an audit, but I was pretty pleased with the whole process this year. In your case, I would think that if everything is substantiated on official documents based on the additional account and 1099 information, it won't be seen as suspect, simply by virtue of making the amendment. I believe that audits are triggered randomly across the board, or where things look suspect. I don't think your situation looks suspect.
posted by SpacemanStix at 7:45 PM on July 16, 2011

I've filed a 1040X and know other people who have, and in none of these cases did it result in an audit.
posted by grouse at 9:00 PM on July 16, 2011

No additional scrutiny for filing the two 1040x's so far in my case (last year and this year). I was, however, rather frightened by the stories of the two (!) 20-something friends who neglected to do it and ended up paying hundreds more than they would have otherwise.
posted by halogen at 11:18 PM on July 16, 2011 [1 favorite]

I received a 1099 several weeks after the deadline last year and had to file a 1040X to report it. I owed something like $12 additional tax as a result. I was not audited.
posted by Nothlit at 6:12 AM on July 17, 2011

I would think that having an incorrect tax return in the system is a far greater audit magnet than correcting it would be.
posted by gjc at 6:40 AM on July 17, 2011

To second what gjc said, in the case of the 1099, the IRS has been informed that you received this income, and that's almost certainly the case with the brokerage software as well, so they'll be able to tell that it was unreported on your tax return regardless of whether you file the amendment form.
posted by camcgee at 7:55 AM on July 17, 2011