If you are self-employed, a small business owner or a member of the gig economy, you know how hard it can be to meet your income tax obligations. By now you understand the importance of filing quarterly tax returns based on your anticipated business or self-employment income, and you dutifully write those checks to the IRS every three months. When you do file your official return and see that you are due a refund, it is always tempting to take the cash, but you also have the option of applying that refund to your future taxes.
In many cases, this option makes sense, since it reduces the amount of money you need to withhold from your future earnings and frees up your current cash flow. For this reason, many business owners, gig workers and self-employed individuals do choose to apply their tax refunds to their future tax bills. But what if you already made that choice and something changes? Do you simply live with the choice and cut corners until your income stabilizes, or is there something you can do to reverse the decision.
If you have already filed your return and chosen to have your refund applied to future taxes, you can reverse that decision using a little known but very powerful filing tactic. That filing tactic is known as the superseding return, and it is incredibly easy to do.
How to File a Superseding Return
To file a superseding return and claim your tax refund money now, simply complete IRS form 1040X. This is the same form used to file an amended tax return, and it should be used here as well.
Be sure to check the appropriate box to claim your tax return now, either through direct deposit or a check sent to your residence. Double-check your bank account information to make sure it is correct; the last thing you want is to have the money held up due to incorrect banking information.
You can include a note if you wish indicating that this is a superseding return, but this is not required. As long as the new return is filed before the official tax filing deadline, the IRS will automatically treat it as a superseding document.
The tax refund you are due is your money, and you have a right to claim it now. If your financial situation has changed since you filed your original return and the IRS tax filing deadline has not yet passed, you can use a superseding return to claim your tax refund now, so you can get the cash you need to build your business, pay your bills and live your life.