Filing Mistake - Put Stock Sale Under Wife's Name
Hello,
I just realized right after completing my taxes that 3 of my stock sales were under my wife's name instead of mine. Such a dumb mistake not double checking since FreeTax program was defaulting my wife's name every time I add a new stock sale entry. We are filing jointly so want to amend taxes the right way to fix the error.
What is the best way to amend my taxes? I heard it's best to wait for the refund first before amending taxes but not sure if that will put a red flag to audit. Also, how severe is this type of mistake? My wife only had 1 stock sale and I had 24. If the IRS sees both 1099-B's it will show that the name was the wrong person.
Appreciate your advice!
Answers
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Hello fkhart123,
The IRS understands that mistakes happens. Because you are filing a Married Filing Jointly return, you generally do not need to amend your tax return to fix which spouse owned the stock. On a joint return, the IRS treats all income as belonging to the couple, so reversing the owner of a sale usually does not change the total taxable income, tax liability, or refund amount.
The Schedule D and Form 8949, list both of you on the form and DO NOT designate who the account or stock belongs to.
Wait until any refund is received or taxes paid. Only amend if this error causes a difference in reporting obligations, such as an incorrect amount for a specific state deduction or if the stock was non-joint, separate property that impacts specific state tax filing requirements.
What state do you live in. If you live in a joint property state, then no amendment would be needed. Look at your state return for any reporting differences.
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