How to File an Amended Tax Return

Correcting Tax Mistakes Using Form 1040X

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It can happen to any 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. You drop the return in the mail or click on the e-file button on your computer. Then a new W-2 or 1099 arrives for income that you'd forgotten about or your ex tells you that she also claimed your child as a dependent. 

Don't worry—it's not the end of the world.

Just Amend Your Return 

Revising your return to correct errors and oversights can be accomplished by simply filing Form 1040X, the amended return. There are a couple of drawbacks, however. 

Amended tax returns have to be mailed to the IRS in paper form 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 the tax calculations on your original tax return. Do not file an amended return just to correct math errors. The IRS computers will check your math and correct any errors in calculation. 

You'd file an amendment if you have to report additional income from a W-2 or 1099 that arrived after you filed your return.

If you have to remove dependents because it turns out you were not eligible to claim them, you should file an amendment. You should also file Form 1040X if you want to claim additional dependents. Talk with family members first and make sure you're entitled to claim them and that no one else has done so. 

You can change your filing status if you got it wrong, such as if you filed as head of household only to realize that you don't actually qualify. And remember that your dependents—or, more specifically, a lack of qualifying dependents—can disqualify you as head of household. So if you remove all your dependents, you might have to change your filing status, too. 

You might want to make changes to your tax deductions. You can amend your above-the-line deductionsstandard deduction, or itemized deductions on Form 1040X.

You can change your personal exemptions as well, at least for the 2017 tax year and on previous years' returns. Keep in mind that personal exemptions are only available through the 2017 tax year. The Tax Cuts and Jobs Act eliminated these deductions beginning January 1, 2018 through at least 2025. 

You can claim additional tax credits that you missed when you filed your original return, remove tax credits mistakenly taken, or recalculate the amount of the credits. 

Is There a Statute of Limitations?

You have three years to make any corrections that will result in a tax refund or an additional refund. This is because there's a three-year statute of limitations on issuing refunds. This three-year period begins on April 15 if you filed your original 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 any refundable tax credits you might have missed claiming when you filed your original return.

Taxpayers who want to report additional income or correct overstated deductions can file an amended return at any time. The IRS also has three years to audit your tax return, and it might have more time if there's been 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.

It doesn't matter if your original tax return, the one you're amending, was Form 1040EZ or Form 1040A. You must still 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.

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 the information on 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 like this:

"I am reporting additional wages and additional withholding from a W-2 that wasn't included on my previous tax return. This resulted in changes to my adjusted gross income, taxable income, total tax, and my 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 to the specific changes you're making and where they 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 18 through 23 of Form 1040X. If you received a larger refund from 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'll receive a paper check. 

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 23.

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 page 15 of the Instructions for Form 1040X

What Happens When You File an Amended Return?

The IRS Service Center will 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. 

The IRS scrutinizes amended tax returns a little more carefully during processing so take extra care to make sure your new 1040 is as complete and accurate as possible. Attach all necessary schedules, forms, and documentation. 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 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.

Do Amended Returns Trigger an Audit?

So far, there's no conclusive evidence that an amended tax return will trigger an audit. The IRS uses the same screening process for Forms 1040X that it uses for regular returns.