How to File an Amended Tax Return
Correcting Tax Mistakes Using Form 1040X
It happens to the best of us. You gather all your tax documents, you crunch the numbers, and you double check everything on your tax return. Everything is in order. Then, no sooner have you dropped the return in the mail or pressed the efile button but a new W-2 or 1099 arrives for income that you'd forgotten about. Now you have to revise your tax return.
Don't worry – it's not the end of the world.
Revising your return can be accomplished by filing an amendment. Use Form 1040X along with a new Form 1040, plus any other necessary schedules and forms. There are a couple of drawbacks. Amended tax returns have to be mailed to the IRS on paper for manual processing. The IRS typically processes an amended return within about eight to 12 weeks, but this process can take longer during its busiest times.
Why File an Amendment?
File an amended tax return if you have to correct any information that will alter your tax calculations. For example, you'd have to file an amendment if you must report additional income from a W-2 that arrived after you filed your original return. If you have to remove dependents because it turns out you were not eligible to claim them, you should file an amendment.
Typical reasons for filing an amendment include:
- Claiming additional dependents
- Removing dependents you previously claimed
- Reporting your proper filing status
- Reporting additional income from a W-2, 1099 or other income statement
- Making changes in your above-the-line deductions, standard deduction or itemized deductions
- Changing your personal exemptions
- Claiming additional tax credits, removing tax credits mistakenly taken, or recalculating the amount of the credits
- Reporting additional withholding from a W-2 or 1099
You should not file an amended return just to correct math errors. The IRS computers will check your math and correct any errors in calculation.
Is There a Statute of Limitations?
You only have three years to make any corrections that will result in additional tax refunds. This is because there's a three-year statute of limitations on issuing tax refund checks. This three-year period is based on when you filed your original tax return. It begins on April 15 if you filed your return on or before that date, but if you requested an extension, the three-year period runs from October 15.
If you're beyond the three-year period, you can only receive refunds for overpaid taxes that were paid during the previous two years. You can't collect for refundable tax credits.
People who need to report additional income or to correct overstated deductions can file an amended return at any time. The IRS also has three years to audit your tax return, and it may have longer if there's substantial under-reporting.
How to Prepare an Amended Return
Amending your tax return is a two-part process. First you'll have to prepare a new tax return using the long Form 1040 and any additional schedules, then you must report the revised figures on Form 1040X.
It doesn't matter if you filed your original tax return using 1040EZ or 1040A forms. You'll still have to fill out a full 1040 for the amended return because you must match up line items from your new Form 1040 to the various lines on Form 1040X.
The IRS scrutinizes amended tax returns a little more carefully, so take extra care to make sure your new 1040 is as complete and accurate as possible. Attach all necessary schedules, forms and documentation so the IRS has a complete set of information about the changes you're making.
Preparing Form 1040X
Make sure you have your original tax return and your new Form 1040 in front of you when you begin working on Form 1040X. This form basically summarizes information from your newly revised Form 1040. You'll be transferring information from your corrected 1040 to the 1040X form.
The most important part of Form 1040X is Part III on the second page. This is where you explain the changes being made to your previously filed tax return. Clear and concise explanations can help the IRS process your amended return more efficiently. You can prepare a separate statement if you need additional space.
For example, let's say that you forgot to include wages from a W-2. Your Part III explanation might read as follows:
"I am reporting additional wages and additional withholding from a W-2 I forgot to include on my previous tax return. This resulted in changes to my adjusted gross income, taxable income, total tax and refund. Enclosed is a new 1040, as corrected, with a copy of the W-2 attached."
Try to be as concise as possible and point the IRS agent to the specific changes you're making and where he can find proof of those revisions in your supporting documentation.
Some Things to Watch Out For
Indicate the tax year of the return you're amending at the top of Form 1040X. This is a generic form and can be used for any tax year. You'll have to submit separate Forms 1040X for each year if you want to revise several tax returns.
Now check the numbers and your math, and check them again.
Calculations for your refund or the amount you owe the IRS go on lines 17 through 22. If you received a larger refund on your original tax return than you should have, you'll have to reimburse the IRS. Enclose a check for the difference. If you're due an additional refund, you can expect it to arrive in approximately eight to 12 weeks. Refunds from amended returns cannot be issued via direct deposit.
You also have the option of applying some or all of your refund to next year's estimated tax. Just indicate the tax year to which you want the IRS to apply payments on line 22.
Sign and date the amended return. If an accountant helps you prepare the amendment, the accountant must sign and date the amended return as well.
Where to File Your Amended Tax Return
Mail your amendment to the same IRS Service Center that processed your original tax return. If you efiled that return or don't remember where you mailed it, you can simply send the amended return to one of the IRS Service Centers shown on pages 4 and 5 of the Instructions for Form 1040X.
What Happens When You File an Amended Return?
The IRS Service Center will manually process your amended return. It will check to make sure your explanations are sufficient and that you have documented the changes you made to your tax return. If the IRS needs more explanation or documentation, you'll receive a letter asking for the specific information needed.
Do Amended Returns Trigger an Audit?
So far, there's no conclusive evidence that an amended tax return will trigger an IRS audit. As mentioned, the IRS does check amended tax returns more thoroughly than original tax returns, but if you clearly explain why you're correcting your tax return and if you back it up with proper documentation, the IRS is likely to process your amended return more efficiently and without fuss. The IRS agent can look up most corroborating information on the IRS computer, but it will be easier and more efficient if he can see the documentation right there with your tax return.
Resources on the IRS Web site
- Amended Returns – IRS Tax Topic 308
- Form 1040X [PDF]
- Instructions for Form 1040X [Web]
- Instructions for Form 1040X [PDF]
- Where's My Amended Return? - a Web application for checking on the status of an amended return mailed to the IRS.