is there a need for an amended tax return?
Well, I asked this question some time ago and received no reply so I'm beginning to doubt this site is real. I received a corrected 1099 composite for tax year 2019. The two categories that switched amounts (almost dollar for dollar) were Line 1a (ordinary dividends) and Line 3 (nondividend distributions). All I want to know is if it would be advisable for me to file an amended return - or will it make zero difference in the tax I owe - so forget about it. If I don't get an answer this time, then I have to conclude this is a bogus site simply intended to gather more clients and not offer any real free advise.
Answer:
As a CPA, I came across this website and joined just last week, and I just came across your question.
If you received a corrected composite Form 1099 with Line 1a (ordinary dividends) and Line 3 (nondividend distributions) switched, it would definitely make a difference. Why? Because ordinary dividends are income that must be reported, subject to either the long-term capital gains rate applicable to you or the marginal tax rate on ordinary income for you. The extent to which each rate applies to you depends on how much is reported in Line 1b (qualified dividends). So whether line 1a (ordinary dividends) went up or down with the corrected composite Form 1099, it would have an impact on your taxes.
Having said that, I feel that whether or not you should do an amended tax return depends on the amount of the change from the corrected composite Form 1099. If it was material, I would do an amended return. If it was de minimis (very small), I wouldn’t bother. Just know that if you do not amend, you should not be surprised to eventually receive a notice from the Internal Revenue Service, potentially assessing more tax plus some penalty and interest. That’s why I recommend you make your judgment based on the dollar amount involved. If the amount involved is very small, the time (and potential expense to pay someone to amend) doesn’t make sense.
I hope that helps. I wish you the very best!
Adam Dickreiter
