Would you file an amended return?

[schildi]

When doing my taxes this year, I noticed a deduction we can take but have not taken last year: the cost of DS's preschool. He goes there a couple hours a week so my wife has time to prepare for her weekend teaching job and do administrative work for the school she teaches at.
So I went into last years TurboTax, and it looks like we could get another $120 or so back if I would file an amended return. It's already completed, I'd just have to print and mail it.

Now my hesitation is that I do not want to risk an audit by filing an amended return. No, I was not cheating on my taxes, everything is correct on all my returns as far as I know (I took standard deductions always anyway - no state tax). Just the chance of an audit and having to dig up years of paperwork frightens me.

What would you do? I feel that an amended return could pose an audit risk. Would you do it for $120?

[DVM gone riding]

I doubt it would trigger an audit-what does TT say your "audit risk level" is? I would do it as long as I had clear documents showing what I paid to the preschool-with out those I wouldn't do it.

[TD2K]

I don't see it triggering an audit Schildi if it's a legit deduction. Any more than if you had caught it last year would have triggered one.

[schildi]

Yeah, maybe I'll just do it ....

[kinetickid]

I thought preschool was only deductible if both parents worked full time and/or went to school full time? If Schildi's wife only worked part time, then I don't think it's a legitimate deduction.

That said, I personally have filed an amended return. In my case, we had forgotten some tuition credits. It didn't result in a large refund, but it was something and well worth the few minutes I spent filing the amended return.

[schildi]

Jan 27, 2011 2:14:05 GMT -5 @kinetickid said:

I thought preschool was only deductible if both parents worked full time and/or went to school full time? If Schildi's wife only worked part time, then I don't think it's a legitimate deduction.

That said, I personally have filed an amended return. In my case, we had forgotten some tuition credits. It didn't result in a large refund, but it was something and well worth the few minutes I spent filing the amended return.

Kinetickid, it says nothing about both parents having to work full time: www.irs.gov/publications/p503/ar02.html
So I think this really is a legitimate tax credit for us (it's not a deduction). Look at the qualification test in the above link, the important question there is: "Did you have earned income during the year?" and not "Did you work full time during the year".

Here is a quote from the IRS link specific to preschool:

Education. Expenses for a child in nursery school, pre-school, or similar programs for children below the level of kindergarten are expenses for care.
Expenses to attend kindergarten or a higher grade are not expenses for care. Do not use these expenses to figure your credit.
However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be expenses for care.
Summer school and tutoring programs are not for care.
Example 1.
You take your 3-year-old child to a nursery school that provides lunch and a few educational activities as part of its preschool childcare service. The lunch and educational activities are incident to the childcare, and their cost cannot be separated from the cost of care. You can count the total cost when you figure the credit.


I hope I am not misinterpreting this, but it seems pretty clear to me. BTW, if it was a deduction instead of a credit, we could NOT take it, as we are taking the standard deduction.

[schildi]

This message has been deleted.

[jeffreymo]

I would. A few years ago I had realized that I failed to take the Lifetime Learning Credit on my previous 3 years returns.
I submitted all 3 amended returns at the same time and was not audited.

[shanendoah]

I had a year where we made two mistakes - one that would have caused us to owe more and one that caused us to owe less. I filed an ammended return that included both (we still got a little more money back), with no audit triggered.
And trust me, I'm waiting for an audit, because we're the people who actually save all of our receipts for the year and deduct actual sales tax, not the piddly little amount they calculate.

[Plain Old Petunia]

Yes, I would amend my return. Amended returns do not trigger audits. Also, there is no requirement that both parents work full-time. You qualify for the credit, you may as well take it.

[Deleted]

I would. Every darn dime that comes into my house gets reported to the IRS and I'll take every legitimate deduction/credit I can. I wouldn't worry about it triggering an audit. I'm in a high income bracket and many of my deductions are way above average- when I was in NJ it was mortgage interest and property taxes, now it's Charitable. A couple of times I've had to correct my return; they once bounced it back because I'd neglected to list a mutual fund sale. In 30+ years of paying taxes, I've never been audited.

It may be that they target people whose income sources make it easier to evade taxes, such as the self-employed and people running mostly cash businesses. I've been a wage slave all my adult life and just about everything on my return is straightforward to document. If you're in the same position you're probably safe.