Cutting Through the Confusion of Inheritance Tax
In the simplest terms, an inheritance tax is a state tax that’s imposed on the receipt of assets from someone who passes away.
The time has finally arrived - the IRS will officially begin accepting 2019 amended income tax returns (Form 1040-X) electronically this summer! Prior to 2020, individuals could only amend their tax returns the old fashioned way (paper). Tax professionals and taxpayers alike are relieved to no longer have to overcome the processing delays that come with paper filing amended returns, at least for 2019 filings.
As it stands today, according to the IRS website, it can take up to three weeks from the date amendments are mailed in to be reflected in their system. Overall, it can take up to 16 weeks to process them or six to eight weeks if circumstances are ideal. And given the current state of economic and social affairs, well, you get the idea. Amidst the pandemic beginning back in March/April, the IRS recognized a significant bottleneck of mailed-in returns, causing even greater setbacks in processing times than usual. In response to the limitations that came with social distancing procedures, the IRS came to this conclusion to accommodate those individuals moving forward. Taxpayers can soon embrace the prospect of their refunds being directly deposited to their accounts for e-filed amended returns versus having to wait weeks (sometimes months) to receive their checks in the mail.
Granted, this news still defers to normal amendment regulations.
Individuals still have until July 15th (the extended tax deadline) to file their 2019 personal returns.
Filing an amended return does not extend the time to pay what you owe.
And, the IRS will only be allowing amendments to be e-filed for 2019 income tax returns. If you have amendments for any prior year, multi-year, or business returns, those will still need to be paper-filed.
The goal is for the IRS to eventually authorize e-filed amendments for multiple years and businesses, but given the backend complexities, they’ll cross that bridge when they get there.
The IRS receives about 3 million Form 1040-X (formally 1040X) submissions every year. However, with the pandemic, that amount is expected to be significantly higher than the yearly average due to families and individuals staying at home. Keep in mind that filing amendments is recommended to adjust income that wasn’t correctly reported on your initial filing, collect tax credits originally missed, or correct missing line items on your prepped return. So if you’re looking to amend, consult with a tax professional to ensure it’s being done for the right reasons. You can easily do so by signing up with Taxfyle to get connected with an on-demand Pro. The IRS has yet to announce when it intends to open this program to the public, but with the July 15th deadline approaching, it’s safe to say it’ll be sooner rather than later.
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