Bad Tax Idea: Filing an amended return before your original return has hit the IRS or the state taxing agency.
With the prevalence of software and websites that let you file for yourself, you are inclined to jump right in and e-file to get back any refund that you are anticipating. Then boom, without fail, – a W-2 comes from a part time job you forgot about or you get a Form t 1099-INT for a savings account that you forgot about as well.
Looks like you had an extra $500 in income that there wasn’t enough tax taken out for or you earned interest for $123.
So you decide to amend your tax return.
The correct thing to do is first wait until you get back your refund from the Fed (and state if you filed and are expecting a refund there as well). The IRS and state taxing agency may correct it for you. They may not. It is only after you have received your refund that you should file and then prepare the amended tax return and pay back whatever it is that you might owe. Who knows, maybe you will find something else you missed and you might get a larger refund.
The reason you need to wait before filing an amended return is that the amended returns are processed at different departments than the regular tax returns. Sometimes it takes months for them to get processed. There IS a chance; however, that the amended return might get processed before the first return you filed and you don’t want that to happen! If things get filed backwards, the IRS and/or state tax authority will be sending you a letter!
Good Tax Idea: Try to exercise some patience and wait till you get all your tax forms from your banks and employers. If in doubt, call them or check on their websites to see when they are sending out their forms. Verify that they are the final forms!
Sometimes banks send out corrected 1099-INTS and if that is the case, you need to amend your tax return accordingly..