Amended Return: All You Need To Know To File One

Over 144 million people file their tax returns every year in the US. Thanks to the advent of e-filing, affordable tax software solutions, and online tax return filing systems, the entire process of filing taxes is becoming more straightforward. At the same time, mistakes can still happen - especially if you’re not a finance expert. 

Luckily, there are tools you can use to correct a mistake and file an amended return. This strategy allows you to take advantage of tax deductions, correct and error, or claim a credit.

Let’s Start From the Basics

Amended tax returns allow you to communicate with the Internal Revenue Service about a mistake made when filing a tax return and correct it. Filing an amended tax return is fairly straightforward, but it will require you to fill out a special form called Form 1040-X or the Amended US Individual Income Tax Return.

Thanks to the recently introduced e-filing system made available by the IRS, you can now file this form online through the IRS portal.

After gathering your documents, all you’ll need to do is submit an IRS Form 1040-X, which allows you to highlight the error, mistake, or needed correction on the original tax return. 

To successfully amend a tax return, make sure you:

• Fill out a separate form for each year of returns you need to amend.
• Submit the amended return within three years of filing the original tax return (the one with the mistake).

Form 1040-X is particularly useful for highlighting an error in your tax return before the IRS notices it or adjusting your status and taxes if something changes after you file the original tax return.

When To Amend a Tax Return

You should amend or correct a tax return as soon as you spot a mistake - even if that is before the IRS gets the chance to review your tax return. However, you don’t always need to file an amended return for all mistakes. That’s because the IRS will correct certain mistakes in your tax return on your behalf.

The IRS includes General Math Error Procedures as part of its Customer Account Services. In the case of the 17 “mathematical and clerical mistakes” specified in this document, there won’t be any action required from you. In these instances, the Math Error Authority will automatically adjust the mistake in accordance with the National Taxpayer Advocate.

However, there are some situations in which you’ll need to file an amended return. This happens when:

• You wish to claim a tax credit or deduction that was not included in the original return.
• You require account updates or changes to your account liability.
• You wish to adjust your income or expenses after a miscalculation.
• You are looking to get refunds because of losses that are carried over from previous years.
• You need to correct your tax filing status.
• Your situation has changed and you wish to add or remove a dependent.

Of course, these are just examples. If you are still unsure if you should go through with it, you should use the IRS’s Interactive Tax Assistant to find the answers you need.

How To File an Amended Return With the IRS

Filing an amended tax return is not complicated, but if you’ve never done it before, the process might seem intimidating. Learn more in the step-by-step guide below. 

Timings and Deadlines To Process an Amended Return

Timings matter greatly here. Here are the deadlines to keep in mind:

• File an amended tax return up to three years after the original filing deadline.
• File an amended tax return within two years of paying the taxes due that year.
• Beyond these deadlines, you cannot submit an amended return.

The Forms Needed To File an Amended Tax Return

Here’s what you’ll need:

• A separate IRS Form 1040-X for each year’s tax return to amend
• A copy of the original tax return - you can find it through the portal used to file your taxes or you can formally request a copy
• Notices from the IRS that highlight issues with the tax return
• Any supporting documentation

You’ll also need to bring documents necessary for your specific situation. For example, if you have a new W-2 form from your employer or a 1099 form that changes your taxpayer status, you’ll need to bring these along. 

The Process To File an Amended Return

You can complete the entire procedure online if the original tax return that needs amending has been filed online in 2021 or after.

To avoid pitfalls, follow the instructions on the IRS website. Keep in mind that the form has three columns that need addressing:

• Column A will require you to resubmit the numbers of the original tax return.
• Column B is where you’ll highlight the differences between the original return and the amended one.
• Column C is where you’ll add the new numbers.

Once the form is accurately filled out, you can submit it online or mail it to the local IRS office. 

What To Expect After Filing an Amended Return

It’s strongly recommended that you amend your tax return if you spot a mistake in it. You can do it for free, and it can help you avoid penalties and the tax preparer’s charges. 

You should not expect to raise a red flag with the IRS because of an amended tax return, but keep in mind that if you amend your federal taxes, you should adjust the state tax too. Also, amended returns that ask for high tax refunds might trigger an audit.

After you have filed your amended tax return, the IRS can take up to 16 weeks to process the new form. And it can take three weeks for the amended form to show up on the IRS system. You should only get in touch with a local office if you have not received any notice after this time.

However, you can always check the progress through the IRS’s online tracking tool.