Tax Return Amendments

GIMME A TAX BREAK

AMENDMENT OF TAX RETURNS FOR OVER REPORTED INCOME

I would say that most of the tax returns that are amended by our office involve a situation where income has been originally over reported. This can be caused by many different situations. You might receive a revised form 1099 showing a correction to the amount of interest or dividends which should be reported. Obviously, if the revised 1099 shows less income, you need to consider preparation of an amended return.

One of the areas in which you could overpay your income tax is in the area of exercising stock options. The really sad part of this situation is that you may not realize you have over reported your income, and never file an amended return. This scenario is compounded by the fact that many professional tax preparers are also unfamiliar with the proper treatment of stock options.

Most people are unfamiliar with the mechanics involved in their exercise of employer stock options. Consequently they do not understand how the employer, working with the brokerage firm, accounts for the gain on the disposition of the shares they have purchased.

Our office offers a free half hour consultation to allow for the review of your return to determine if there has been over reported income on the exercise of stock options. If this is the case, we are able to amend your return and get back a very substantial refund.