How do I file an Amended Tax Return?
March 18, 2012
Almost everyone will, at one time or another, have to amend an already-filed tax return. No matter how careful you are, there are things than can slip by your notice: an interest statement you forgot to add, a new W-2 that arrived late in the mail, or some newly-found information that might increase your return. It is possible to amend your tax return without any negative consequences, so if you find that your previous return is incorrect, be sure to file an amendment to get things straightened out.
What IRS Form do I need?
To amend your tax return, you will need to obtain Federal Form 1040X along with a new Form 1040. You cannot e-file an amended return; it must be mailed to the IRS. Depending on when you mail your amended return, it can take between eight and 12 weeks for the IRS to process it.
There are certain circumstances where it is not necessary to file an amended return, even if the information on your return is inaccurate. For example, if you discover after filing that you have made a mathematical error on your return, the IRS will automatically correct such an error before issuing your refund or figuring your tax. If you owe more tax, you will receive a notice and should pay the tax promptly to avoid penalties and interest.
How long do I have to file an amended tax return?
You have three years in which to file an amended return and receive a refund. The three-year period is figured from April 15 of the year in which you file your return, or October 15 if you requested an extension. If you do not file your amended return within the three-year period, you will lose the right to any refund you might have collected.
However, if you have under-reported your income, the IRS has at least three years to catch the error and ask you to correct the error. A good rule of thumb is to keep your tax returns for ten years if you have income over $75,000 per year, and at least seven years if you have income under that amount.
What corrections can I make on my tax return?
There are several corrections you can make on an amended return. You can claim additional dependents or remove dependents you previously claimed. For example, if one of your children lives away from home but was originally listed as your dependent, you can change this status if it becomes apparent that your child could receive a larger return by filing individually. Similarly, you can amend your
return to show a child as a dependent if it would be more beneficial to list the child this way. Of course, your child must meet the dependency tests to be added to your return.
You can also change your above-the-line deductions, itemized deductions, or standard deductions if circumstances change to allow you to do so. You can also change your personal exemptions if you receive information that indicates you should add or take away exemptions. You may also want to amend your return if you find that you have not taken certain tax credits or if you mistakenly took these credits.
Do I have to prepare a new return or just file a single form?
In order to amend your return, you must prepare a new return altogether, using the same information as your original return with any changes. In other words, you prepare your return as if you were doing it for the first time correctly. Next, you report the revised figures on the form 1040X, so you will need to have access to the incorrect return, as well.
No matter what type of return you originally filed, even if it was a 1040EZ or 1040A, you should file a full 1040 for your amended return. The IRS will carefully review any amended return, so be sure that your new return is correct in every aspect.
The most important part of the 1040X is Part C. Part C lists the changes you have made on your 1040 form, so be sure to review this information in detail and be sure your figures agree between your old tax return and your new 1040. You may have to give a narrative response on Part C, such as “Filing an amended return to add income previously undeclared due to the late arrival of a W-2 Form.”
If you received too much in your original refund, you will need to attach a check with the difference between your old and new refund filled in, and include this information on your 1040X. If you do not owe any money, you can expect to receive your refund within a few weeks. You can speed this process by asking for direct deposit of your new refund amount.
You should also be aware that changes to your federal return may cause changes in your state or local returns. Visit your state’s tax website or talk to your local taxation office to determine the process for filing an amended state or local return.
Written by Alan Dunn – one of our highly talented and underpaid writers. For more information on Alan follow him on Twitter or Google Plus