Don't you hate 1040X explanation fields limited to one line?

[Pacun]

I have about 10 returns to amend (Thank God for the extra dinero I will charge for the amendments... no mia culpa). All returns will have the same situation and what will change is ONLY amount received ($10,000, $12,000 or $17,500) and the refund amount. It will be nice if I could copy and paste this paragraph but I have to chop it so that it fits each line. Some sentences are hard to understand because of the chopping but I have to follow the line limitations on 1040X. Needless to say that I have to copy and paste 5 times. This is my explanation on 1040X.

PROGRAM COORDINATOR WRONGLY SENT FORM 1099-NEC FOR $10,000. LATER, A  CORRECTED 1099-NEC WAS ISSUED

FOR THE AMOUNT OF 0 DOLLARS. 1099-NEC WAS ORIGINALLY REPORTED ON SCHEDULE C WITH SE TAXES.

A 1099-MISC WAS ISSUED FOR $10,000 AND IT IS NOW REPORTED ON THIS 1040X AS OTHER INCOME.

AS A RESULT, LINES 1, 3, 5 CHANGED AND SO DID THE TAX LIABILITY.

PLEASE ISSUE MY REFUND FOR $1,107 AT YOUR EARLIEST CONVENIENCE.

 

I would be nice if I could just copy and paste everything at once. It is very interesting the each of my clients will owe state taxes and it is very interesting how I will have to explain that schedule C has two federal tax breaks that were originally transferred to the state but now we have to add them back and pay taxes to the state.  For the federal, people don't mind that those two tax breaks are gone because they are getting a refund. 

At simple sight, I would think that the only thing affected in this situation is the collection back of SE taxes because income stays the same. I was wrong. I had a client that I got an error stating during amending... you are checking earned income credit on form 8867 and no earned income is claimed. I carefully checked the return and of course, the message was correct. I was no longer claiming earned income credit because my client's income had risen.  

 

 

[Lion EA]

I don't use ATX, but could you type out your full statement in Word, save as a .pdf, and attach to each Form 1040-X?. Even if you will be changing one or two amounts on each statement, it should  be faster to edit the .doc then save as .pdf and attach to e-file. But wait for one of the ATX gurus to give you the best work-around...

[Pacun]

That's a good idea.  I usually don't like to attach anything to the returns so I might have to manually make the corrections.

Is the line by line a requirement on the 1040X? How about your software, does it allow you to type 300 words of explanation in one field?

[Lion EA]

Haven't amended in a while (have one upcoming where a bio parent claimed child that lived with my client all year; placed by a court as a foster child with my client) so don't remember, but I think I've been able to type "freestyle" in ProSystem fx. I've had amendments that changed several lines, but all because of one item, one income change or deduction change, that then changed other lines. So my explanation has been one descriptive item with a list of the lines it changed.

[Catherine]

I'd put it in Word and then copy and paste from there into the 1040X. Does ATX allow that?  Good luck! At least you don't have to deal with three completely separate issues with thorny explanations each.

[Sara EA]

I was taught to write explanations line by line for those that changed, although this no longer appears in the instructions.  This would certainly abbreviate your text.  For example:

Lines a, b, c :  Corrected Form NEC received.

Line d:  Form 1099-MISC  added.

Line ?:  SE tax changed as result of above.

No need to tell them how much the refund is, as that's in the 1040X.

 

 

[Abby Normal]

I keep my explanations brief. You listed a bunch of things the IRS already knows just by the nature of the 1040X.

Here's how I'd edit your explanation:

CORRECTED FORM 1099-NEC ($10,000).

CORRECTED 1099-MISC: $10,000
----------------------------------------------

It seems to me that line 1 net change would be zero, and the other lines only change due to form calculations, so there's no need to explain this to the IRS.

And you could combine the two lines above into one line for convenience of copying and pasting.

Brevity, above all else.

[JohnH]

11 hours ago, Abby Normal said:

I keep my explanations brief. You listed a bunch of things the IRS already knows just by the nature of the 1040X.

Here's how I'd edit your explanation:

CORRECTED FORM 1099-NEC ($10,000).

CORRECTED 1099-MISC: $10,000
----------------------------------------------

It seems to me that line 1 net change would be zero, and the other lines only change due to form calculations, so there's no need to explain this to the IRS.

And you could combine the two lines above into one line for convenience of copying and pasting.

Brevity, above all else.

I agree. “Brevity, paramount.”

[Pacun]

21 hours ago, Abby Normal said:

I keep my explanations brief. You listed a bunch of things the IRS already knows just by the nature of the 1040X.

Here's how I'd edit your explanation:

CORRECTED FORM 1099-NEC ($10,000).

CORRECTED 1099-MISC: $10,000
----------------------------------------------

It seems to me that line 1 net change would be zero, and the other lines only change due to form calculations, so there's no need to explain this to the IRS.

And you could combine the two lines above into one line for convenience of copying and pasting.

Brevity, above all else.

If you only glance, you would think everything will stay the same... only affecting SE, but in some cases, this event will put people outside of EIC (too much income), Make then return ACA premium advaces since the extra income will force them out of the 400%, etc.

[Abby Normal]

1 hour ago, Pacun said:

If you only glance, you would think everything will stay the same... only affecting SE, but in some cases, this event will put people outside of EIC (too much income), Make then return ACA premium advaces since the extra income will force them out of the 400%, etc.

Those are all things that flow automatically and will do so in the IRS computers as well. I stand by my call for brevity... ALWAYS.

[Sara EA]

The instructions to 1040x do state to attach all forms and schedules that you are amending.  So, for example, state:

Line X:  Sch SE added.  Attached.

Line Y:  Consolidated 1099 received after original return filed.  Sch D and Form 8949 attached.

Line Z:  Sch EIC changed.  Attached.

In the scenario where EIC was claimed on the original but the client is no longer eligible on the amendment, file the EIC with zeroes.

Some state returns require the line number that changed as well as associated revised schedules.