The 1040X – 15 Facts About Amending Your Tax Return

Many circumstances can come up that will result in amending your tax return. It could be that you received additional information contrary to what you originally used for your return… or maybe the IRS sent you a notice about something that needs clarification.

Whatever the reason, you are amending your tax return. This isn’t usually a big deal, especially with software-driven return preparation – but there are a few things you should know about your amended return.

Ten Facts About Amending Your Tax Return

Below are the “top ten” facts that the IRS has recommended for you to know about amending your tax return:

1. If you need to amend your return, use Form 1040X, Amended US Individual Income Tax Return.
2. Use Form 1040X to correct previously filed Forms 1040, 1040A, or 1040EZ. The 1040X can also be used to correct a return filed electronically; however, you can only paper-file an amended return.
3. You should file an amended return if you discover any of the following items were reported incorrectly: filing status, dependents, total income, deductions, or credits.
4. Generally, you do not need to file an amended return for math errors. The IRS will automatically make the correction. (You still may wish to file an amended return later if the corrections by IRS don’t account for all of your information and result in negative consequences to you.)
5. You usually do not need to file an amended return because you forgot to include tax forms such as W2s or schedules. The IRS normally will send a request asking for these documents.
6. Be sure to enter the year of the return you are amending at the top of Form 1040X. Generally you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later. (This rule applies strictly when an amendment that results in a refund for you.)
7. If you are amending more than one year’s tax return, prepare a 1040X for each year’s return and mail them in separate envelopes to the IRS center for the area in which you live. The 1040X instructions list the addresses for the centers.
8. If the changes involve another schedule or form, you must attach all changed forms to the 1040X.
9. If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.
10. If you discover that you owe additional tax, you should file Form 1040X and pay the tax as soon as possible to limit interest and penalty charges. Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.

In Addition…

In addition to the top ten from the IRS, you should also keep these things in mind:

11. Consider if the change impacts your state return; file an amended return with your state using the instructions from your state. Most often this requires your federal amendment to be processed and accepted as final before filing the state amendment.
12. If you’re filing for a retroactive credit consider how the credit could be impacted by changes in your filing status, income, etc., if you filed it for the current year instead of retroactively. It could be in your favor to claim the credit currently, albeit much later, rather than retroactively.
13. Although the “rule of thumb” time limitation for filing amended returns is the later of 3 years after the filing date of the original return including extensions or 2 years after the tax is paid, for certain items, the time limitation is extended. For example, for disability where the taxpayer is unable to manage financial affairs, the period of limitation for filing a claim for refund is suspended until the disability is no longer an issue. Another example regards worthless debts or securities: the limitation is 7 years after the due date of the return for the year that the debt or security became worthless.
14. It is not allowable to change your filing status from Married Filing Jointly to Married Filing Separately after the original due date of the return, including extensions.
15. If you file Form 1040X on or before due date of the original return, the 1040X will be treated as the original return.

As always, contact your tax professional to help you with your amended return if you have questions or concerns (or call me if you like).