Preparing Form 1040X in Lacerte® From a Filed Return Client File and From Scratch

Practice Management, Workflow tools 1040_2

Creating an amended 1040 Individual tax return in Intuit® ProConnect™ Lacerte® is an extremely easy process. I will cover three scenarios:

  1. Amending a return from the originally reported return client file in Lacerte.
  2. Amending an individual’s return where you were not the preparer of the original return, but you have a client copy of the filed return to work from.
  3. How to “undo” “Screen 59” – the amendment screen – if you turned it on but have changed your mind and do not want to produce a 1040X.

Amending a Return From the Originally Reported Return Client File in Lacerte

To prepare an Amended 1040X from the original Lacerte client file that was used to file the 1040, you will first need to lock that file, if you have not already done so. Locking the file prevents any calculations from changing the file from what was originally reported to the tax authorities. It also prevents any inadvertent data being mistakenly added to the file, changing it from what was originally reported.

To lock the file:

  • From the “Clients” tab in Lacerte, highlight the client file.
  • Using your mouse, right click to present a quick menu and left click “Lock Return,” located about halfway down the pop-up menu. You can also click the “Clients” menu and select “Lock Return” from the menu.
  • If you have the “Locked” column displayed on the “Clients” tab, you will now see a locked pad lock in the column that clients file.

To create a copy of the original return:

  • Highlight the locked original client file.
  • Click the “Client” menu dropdown and select “Copy” on the menu. Or, just press the Windows shortcut key combination of Ctrl + C.
  • A window pops up to assign a new client number to the new file. Note: If you are a Lacerte REP customer, you will be prompted to REP file; proceed, as you will not be charged again for that tax ID number (Social Security number), so long as you filed the original filing of the 1040. However, if you are amending a customer’s return that you did not originally file, you will incur a REP fee. This is true for federal and state amended returns.
  • Click “OK” to complete the creation of the copy file; now, you are ready to proceed with creating an amended return. Here are some screenshots from the program so that you will be familiar with the steps.

Select “Copy” from the menu.

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Recommendation: Enter the same client number with an X to indicate which client includes the amended information. For example, if the original client number is 0001, enter the new client number as 0001X.

To generate the amended return: In the newly created copy of the original client file, follow these steps to generate the amended return:

  • Before entering any data in the return to correct it, first go to “Screen 59 – Amended Return (1040X).”
  • Click on the “Federal/State return(s) to amend (Ctrl+T) (MANDATORY)” drop-down menu.

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  • Select all “Returns to Amend” from the “Amend Returns” window (federal and state).
  • ClickOK” after selecting the “Returns to Amend.”
  • Click “OK” to the information window (verify the date and time indicated is correct before continuing).

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*Note – Here is what the program is doing: The Information window is telling you it is taking a “snapshot” of the originally reported return. After clicking “OK in this window, Lacerte will automatically bring over originally reported amounts from the return into the “Original Amounts” column on “Screen 59, Amended Return (1040X).” At this point, Lacerte “knows” all entries made in other detail tabs are part of the amended return and will pick up those amounts as the amended amounts for the 1040X.

  • Go through the various input screens to make the necessary corrections. For example, if the wages were entered incorrectly on the original return, go to “Screen 10, Wages, Salaries, Tips,” to correct the incorrect wage amount.

*Important Note: Make sure the F4 status of the return is not marked as “Return Complete.” The amounts will not auto populate in this instance.

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The importance of locking and making a copy of the original return will also preserve all of the e-file information and statuses for the return. Copying the return allows you to keep the original with the associated e-file information and edit the copied return. The copy only copies the internal information of the return, such as the amounts.

Amending an Individual’s Return Where You Were not the Preparer of the Original Return, but Have a Client Copy of the Filed Return

Recreating another preparer’s, or software program’s, return in Lacerte can be very difficult and time consuming. In most cases, the return will not generate the same numbers in Lacerte as originally reported by a different preparer or software program. This is because you don’t know how the preparer produced the return, if overrides were used to force amounts in the return or if the software used treats return calculations in the same way Lacerte treats them.

To create an amended return from scratch, when you did not prepare the original filing, follow these steps:

  1. Start a new client file. Here, again, we recommend using an “X” at the end of the Client Number to indicate that it is an amended return.
  2. Enter the client information on “Screen 1” as closely as possible to copy the originally reported return.
  3. Go to “Screen 59” and enter the mandatory field “Federal/State returns to amend.”
  4. Check any boxes that would apply to the amended filing in the “Miscellaneous Information” section.
  5. If an “Explanation of Changes” to the return are warranted, use that input section.
  6. In the “Federal Income Tax Return” section, enter all amounts as they were originally reported in the return that is being amended.
  7. Now, you are ready to enter the amended amounts in one of two ways: You can go to the appropriate input screen and enter the changes, or you can just force the new amounts by using the “Correct Amount [O]” (override) column.

Note: The “Correct Amount” column is an override of the program calculations, based on the numbers in the originally reported column combined with the data entered correctly in the various details screens. So, be aware that if you amend using the various input screens, and you come back to “Screen 59” and enter numbers in the “Correct Amount” column, you are overriding the natural calculation of the program and forcing your number into the field on the form.

When preparing an amended Form 1040 return from scratch, in most cases, it is best to use one method or the other, but not both.

How to “Undo” “Screen 59 Amended Return (1040X)”

It is important to note that if you inadvertently invoke “Screen 59 Amended Return,” you cannot simply remove all of the inputs to start over, or to get the client file back to the state as originally reported.

When you invoke “Screen 59,” the program takes a snapshot of the return as it was originally reported and stores this data in a directory, referring back to this data to generate the 1040X form. Simply deleting the input fields does not clear the stored data, resulting in wasted time and frustration trying to get the file back to the “originally reported” state. This is why we recommend preparing an amended return from a copy file. You could just delete the file and make a new copy.

Follow these simple steps to reset a client file that has had “Screen 59 Amended Return” turned on:

  • Do not use the originally reported file to do an amended return, but if you did ….
  • Go to the various input screens you have put new data into for the amended return.
  • Go to “Screen 59 Amended Return.”
  • Click the “Detail Menu” dropdown at the top of Lacerte and select the “Switch to Batch Mode” item near the bottom of the menu, or press the key combination Ctrl + W.
  • Now, you are in “Batch Input” mode; on the left, find “Screen 59 1040X” (it will be bolded), then click it.
  • In the right-hand window, you will see the “Code,” “State,” “SRC,” “Amount” and “Description” columns with the captured data. Make sure you are at the top of the window by checking your scroll bar.
  • Click into the very first “Code” field at the top of the window.
  • Holding down the “Ctrl” button on the keyboard, press the letter “D” (for delete). This will delete the line in the window. Repeat the deletion until all lines are gone.
  • Click off of “59 1040X” in the left-hand navigation pane; it should no longer be bolded.
  • If you invoked the amendment screen for a state, you will need to perform these same steps for the state amended screens. Look for bolded “59.XX SS” (where XX are numbers and SS is a state abbreviation), and delete all lines of the input.
  • To leave “Batch Input Mode,” just press Ctrl +W again and you will be taken back to “Interactive Input Mode.” Or, click “Detail” on the “Menu” bar at the top of the program and click “Switch to Interactive” from the menu.

I hope these steps help you amend returns in Lacerte. Good luck!

Comments (2) Leave your comment

  1. Hi Harlan. Locking the return upon acceptance of the e-file or paper filing of the return will keep the file from changing as a result of a program update. So the locked file always reflects the reported amounts. When making a copy, that copy file will be unlocked and will calculate with any program changes, possibly changing the reported numbers thus no longer being as reported and accepted. This does not happen often, but it has happened in the past and caused serious issues. This is why our official recommendation is to lock the original filing upon acceptance or filing and keep it locked.

    When completing the amended return in the copy file, the preparer is reporting changes to the return, which would include changes in calculations. When they roll the file to the next year, they can change the client number back to the old file number for consistency going forward.

    I hope this explains why we recommend the process outlined in the article!

    Like

  2. I would suggest a different approach to your recommendation. If my client file is Smith, I will copy the locked filed and call it SmithOrig. Then make the changes and do the amended in the file named Smith. Then when it is rolled to the next year, it will have the correct file name.

    Like

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