What Every Freelancer Should Know about Amended Returns

As a freelancer, it is up to you to pay your taxes and handle all of your tax information. One instance you may come across is needing to amend a return. This could be due to a client that sends you tax information late, or it may be a client you forgot about until after you had already turned in your taxes. If you face having to amend your taxes through your local tax accountant, there are some things you should know.

Required Paperwork

The first thing you need to know about filing an amendment to your returns through your local tax accountant is you need certain paperwork. You will need the tax information form or proof of the amount you were paid and by who. This is the same information you needed for each client that you listed on your original tax paperwork. If all the information you need is not there, such as their tax number or the exact amount you were paid, then you will need to compile that information before moving forward with your amendment.

Timing of Amendment

You may think you can send off the proper paperwork and amendment as soon as you notice the missing information. The truth is you will first need to wait for the current tax paperwork to complete the review and acceptance process. Your tax accountant can check on the status of your tax paperwork and file your amendment as soon as they receive word that the current taxes are reviewed and filed. Keep in mind, if you receive a refund from your taxes you may have to pay that refund back if the amendment results in you owing money instead of receiving more money.

Questions on Your Amendment

Even in the best of circumstances, you may need to prepare yourself to answer some questions about your amendment on your tax return. Tax accountants will be the first to ask you why you need the amendment and why the information was left off or forgotten, and they may even ask for proof from the client. This proof may be in the form of a letter or statement that backs up your reasoning for the information not being filed with your original paperwork. Just make sure you are prepared for the questions and have the proper paperwork if you need it during the process or even after the amendment is sent in.

If you find yourself facing an amendment, attempt to work out something with your tax accountant to ensure that you avoid this issue in the future. You can work out a schedule to keep up with paying your taxes more often, or you can use some form of client reporting to ensure you and your accountant know what you are paid and who paid that money out.