Tax ? for you!

[yyz]

My gal did her taxes, mailed 'em in, and then her sister reminded her about a $5000 bond that she cashed early last year.

Is it a difficult procedure to amend the return she filed?

Should she just "forget about it"?


What say you, Mad Jack Alum?

 

[JB22]

one thing for sure do not forget about it /do the amendment

 

[taoist]

I'm no accountant, but I agree with JB.... The interest and penalties accumulated, if caught, will make you wish you had gone through the trouble to amend it.... I would think that the bank (or whomever issued the bond) would report it to the IRS.... I wouldn't take the chance....

 

[alliecat]

assuming this is a savings bond and not a muni-bond or corporate bond, the income is interest income when you cash it in. This should come in the form of a 1099-Int before the end of the month. The amended return is relatively easy, it is Form 1040X and for this change it is just a couple of numbers. The IRS wouldn't catch the omission for at least 6 months, but they will assess interest (likely not penalties) from the original filing date of the return. If you do nothing, the IRS will send you a notice saying they made an adjustment to your return and will bill you, but I wouldn't wait.

hope this helps

 

[yyz]

assuming this is a savings bond and not a muni-bond or corporate bond, the income is interest income when you cash it in. This should come in the form of a 1099-Int before the end of the month. The amended return is relatively easy, it is Form 1040X and for this change it is just a couple of numbers. The IRS wouldn't catch the omission for at least 6 months, but they will assess interest (likely not penalties) from the original filing date of the return. If you do nothing, the IRS will send you a notice saying they made an adjustment to your return and will bill you, but I wouldn't wait.

hope this helps

That does help, and thanks. That's the stuff I dug up, and the problem is, she is so anal about getting bills paid the second they arrive, and shit like that. So, she did her taxes the day she got the W-2. (She didn't wait for her bank statement, and I'm sure it will be here in a day or two, now!)

She recalls the interest being about $800, so I figure she's looking at about a hundred bucks or so.

The thing I am worried about is she will be getting a refund in the wrong amount now. If she cashes it, will she be in trouble for THAT, too? I have heard stories, but you don't know what's true, and what's shit, you know?

 

[alliecat]

for that amount, I would go ahead and cash the refund, then remit the new tax amount when you mail the 1040X in. You may owe a very very small amount of interest (less than $1) and they will send you a bill for it, maybe not - not sure if they have a threshold.

 

[yyz]

O-Kee-Do-Kee!

Thanks again!