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April 24, 2020
Question

Took the wrong deduction and now I owe - what now?

  • April 24, 2020
  • 2 replies
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My wife and I file separately. I started a couple of online businesses and work as an independent contractor for another job. So, we were under the impression we had to take the itemized deduction in order to "write off" some of the work expenses. 

 

Filing standardized would've given me a refund of a couple of hundred bucks, but filing itemized made me owe $1900! Now I'm basically giving away money to the IRS. I have not filed, but she has already filed and received her return. Is there any way to fix this or do I just have to bite the bullet and pay the $1900??

2 replies

VictoriaD75
April 24, 2020

You can fix it by amending. But, you will have to file her amended return, wait until it is accepted, and then file your return. The other option would be to file your return as is and then amend also. Amended returns must be printed and mailed, so there is a greater delay in processing. Right now, the IRS is not processing paper returns. You may need to consider filing an extension on your own tax return to allow time for processing.

 

Business expenses are deducted against business income on Schedule C for sole proprietors and are not itemized deductions. If you file separately and one spouse itemizes, both must itemize regardless of the amount of deductions.

 

Should you have to amend, follow the steps below:

  1. Log into your TurboTax account
  2. Choose the tax year that you wish to amend
  3. Click Amend
  4. Make any necessary changes

Keep in mind that when you are amending, the refund tracker monitors the difference from your original filing to the amended return. It does not include any original refund or balance due. If you are claiming any previously unclaimed credits, you will see the difference as an additional refund amount. 

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April 24, 2020

Married, filing separately itemized deductions appears to be a complicated issue, but in reality it can be quite simple if you follow some basic rules.

First, the spouse who paid an expense that results in a tax deduction should claim the full deduction.

Second, if you and your spouse paid the expense from a joint account you will need to divide the deduction according to your interest in the account. In community property states, expenses paid with community property (a joint checking account) should be divided in half.

 

if she filed first and itemized  it's really up to her if she want's to amend to use standard. 

 

but again your business expenses go on schedule C not A.