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How to Amend a Business Tax Return

Jun 9, 2022 10:12:24 PM / by Bryan Cremeen posted in small business taxes, small business accounting, problem, how to

Hold on. You just got your business’s tax return, and something doesn’t look right. Is the amount not what you were expecting… like, at all? In extreme situations, this is a punch to the gut. How do you right this wrong? Look into getting your tax return amended.

If you work with an accountant, they should have the expertise to help you. At CSI Accounting & Payroll, we’ve been working with small business taxes for over 50 years. We know exactly how to amend your tax return and would love to assist you, even if you were not previously a client of ours!

Other small business owners who have asked us to amend their tax returns wanted to know:

  • What are the reasons why someone would want a business tax return amended?
  • What is the process of amending a business tax return?
  • How long does it take to amend a business tax return?
  • How much does it cost to get a business tax return amended?

Business tax return with wording Amended Return

Why Should I Get My Business Tax Return Amended?

From an error standpoint, the IRS matches government documents to verify your numbers. If you missed a W-2 Form, for example, you’ll get a letter in 12-18 months saying you owe money - plus a penalty and interest. Amending the return will shorten that time period and minimize penalties and interest.

There are a variety of other reasons why a business owner might want their business’s tax return amended. Here are some examples:

  • You feel that your tax bill is a lot larger than you were expecting and wonder if your accountant did something wrong. Amending your return gives your accountant another chance to right any wrongs.
  • You noticed that something is missing on your return. Maybe you wanted to have some deductions on your return to lower your tax liability, but they somehow didn’t get recorded.
  • While this is less common, you may see something on your return that shouldn’t be there. For example, there is a large sum under “other expenses,” which is a red flag. If you amend the return and remove that, you can help prevent an audit.

The Process of Amending a Business Tax Return

When it comes to amending a tax return, business owners can often feel overwhelmed. It sounds complicated, doesn’t it? You might be surprised to hear that it’s only as difficult as filing a business tax return the first time around.

Here are the steps that your accountant takes to amend your business return:

  1. Gather all of the original documents that you used to file your tax return the first time.
  2. If something was missing from your return, gather the additional documents that were not included last time.
  3. Your accountant will prepare your tax return on Form 1120 as normal, making sure to include the details that were left out of the original form. The only difference is that they will now check the box that says it’s being amended. Easy!

(Please note that the steps above are for your business tax return. If you are amending your personal tax return, you will need to use Form 1040-X, which is a different form than what your personal taxes were originally filed on.)

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The Timeline of Amending a Business Tax Return

Since the process is so similar to preparing and filing a regular business tax return, the timeline is also similar. If you’re having an accountant at CSI amend your return, we place the timeline as follows:

  1. If we need to do back work to fix anything, this needs to be done first. This will typically take us 60-90 days to complete one year’s worth of back taxes. Click here for more information on the back work timeline.
  2. After we get all of the information that we need, your return will be done within seven days.
  3. After your return is amended, it’s up to the government. It will take 8-12 weeks to get a bill or money back, which is about twice as long as it takes for a regular return to get a response.

The Cost of Amending a Business Tax Return

Can your accountant help you amend your tax return? Absolutely! So, what does it cost to get your business tax return amended? It depends. 

If you’re a client of CSI, the fee to amend your return can fall into any of the following categories:

  • If your previous accountant prepared the return that needs to be amended, then we will charge you for us to amend it. The fee will be approximately the same fee we would charge to prepare and file your return if we had done it the first time around.
  • If we prepared the return that needs to be amended and the error was our fault, then we will amend your return at no additional cost to you. 
  • If we prepared the return that needs to be amended but the error was not our fault - typically meaning the client left out information that we did not know about - then we would charge approximately half of the fee of preparing a business tax return.

Amend Your Business Tax Return the Right Way

When you’re not happy with your business’s tax return, it can be a difficult decision to choose which path to take next. Is it worth amending? How do you do that? How long will it take, and what will it cost you?

Now that you know the answers, it’s time to decide if you want to have the experts at CSI Accounting & Payroll help you with your tax return. The good news is that you can schedule a free consultation by clicking the button below!

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Bryan Cremeen

Written by Bryan Cremeen

Bryan joined CSI Accounting in 2019. He joined the team after CSI purchased his accounting firm, AccountSource LLC, which he had owned since 2005. He graduated from St. Cloud State in 2001 with a Bachelor's Degree in Accounting and has been an Enrolled Agent since 2010. Before owning his own accounting practice, Bryan had worked at the State of MN handling financial reporting and had been in private industry as a Controller. His primary responsibilities include overseeing the accounting department and making sure clients are receiving quality service. Fun Fact: Bryan has played soccer since the age of 4. He still plays soccer year round through various adult leagues and is an avid supporter of the Minnesota United MLS soccer team. COYL!!! (Come on, you Loons!!!)

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