When would I need to use IRS Form 1040X when filing my tax return?
Taxpayers use Form 1040X only when making a correction to a previous tax return. The taxpayer may have made an error or omitted information when he or she originally filed the return. The Form is not used to update personal information, such as a postal address or phone number.
Filing a 1040X does not mean that a taxpayer is in trouble. The form may be used to claim deductions or credits that were not claimed when a return was originally filed, and could result in less taxes being owed for the year.
When filing the 1040X, the IRS requires that you provide an explanation as to why the original filing is being adjusted. For example, the taxpayer may have received an additional W-2, or may need to change a filing status from single to married.
The Internal Revenue Service (IRS) allows taxpayers to file a Form 1040X if the taxpayer has already filed a Form 1040, 1040A, 1040EZ, 1040EZ-T, 1040NR or 1040NR-EZ. If corrections are being made to multiple tax forms filed over multiple years, a separate Form 1040X must be filed for each applicable year. The IRS estimates that the average taxpayer spends 9 hours filing a Form 1040X tax return.
Should you file a Form 1040X amended return, or just wait and hope?
Thankfully, potential tax issues cannot haunt you forever. The statute of limitations provides you three years to claim a refund, and also gives the IRS three years to audit you and assess additional taxes. So in general, the IRS will not audit returns which are more than three years old, and the agency claims that it tries to perform most audits within two years of a filing. But it's important to note that this 3-year limit is not a bulletproof legal protection. If a "substantial error" (e.g. fraudulent return, or a finding that more than 25% of your actual income was omitted from a return) is identified, the IRS can audit returns up to 6 years old. Finally, the IRS has up to 10 years to collect any tax liabilities owed by you.
Amended returns are used to correct any information that will alter how your taxes are calculated. However, the IRS says you don't need to file an amended return if you simply made mathematical errors or forgot to include required schedules or attachments. The agency will correct your math errors for you, and they will also send you a request for any missing paperwork.
Common reasons (things that might alter your calculations) for amending a return include:
- Changing the number of dependents you claim
- Changing your filing status (married, single, joint etc.)
- Reporting income that was not included on your original return
- Changing the exemptions or credits you claim (both types and amounts)
- Correcting withholding figures for income you have reported
- Changing the deductions you take
As stated above, a Form 1040X is essentially a replacement Form 1040. The 1040X contains your corrections for the same pieces of information you submitted with your original 1040. Keep the following in mind to ensure your Form 1040X is completed correctly to avoid trouble:
- Choose the right year at the top of the form (the year of the return you are amending)
- If the information prompting your amendment affects the tax calculations for more than one year, you need to file a separate Form 1040X for each year affected
- When you complete and attach forms and schedules for your amended return, use the documents for the year you are amending, which may be different from the most current versions available
- Be clear and concise when completing Part III, "Explanation of Changes" on your Form 1040X. This is where you give a description of the reasons you are amending your return, and which items you are changing. If you prefer, you can attach a separate statement explaining your changes instead of using the box in Form 1040X.
Are There Time Limits to File a 1040X for a Particular Tax Year?
by Diane Dilov-Schultheis
Form 1040X has time limits, but you might qualify for an exception.
You thought you did everything right when you filed your federal tax return. However, later on you discovered you needed to use IRS Form 1040X to make changes, but didn’t know how long you had. Even though there are time limits for filing an amended tax return, you may still have enough time to file.
The IRS allows you to file Form 1040X only after you have filed an original return. In most cases, you must file the amended return within three years after the date you originally filed, including extensions, or within two years after the date you paid any tax due, whichever is later. If you filed your taxes early, the IRS considers your return filled on the due date, such as April 15 for most years. However, if your extension date was October 15 and you filed before this date, such as May 1, the IRS considers May 1 as your filing date.
If you don’t meet the qualifications for the above-described time limit, you still may be able to file a 1040X. According to the IRS, some exceptions concerning the time limit may fit your situation. If you happen to live in a Presidentially designated disaster area, such as after a hurricane or flood, or if you’re affected by terroristic or military action, you may qualify for more time. This includes financial disability or a loss on a worthless security or a bad debt, as well as a foreign tax deduction or credit. It is a tricky situation to figure out these time limit exceptions, so the IRS suggests you consult with a professional tax preparer to see if you qualify.
Reasons you should file a 1040X include correcting your filing status, your total income amount and changing the number of dependents you claimed, or adding tax credits or tax deductions that you forgot when you first filed. Do not file simply to correct any kind of mathematical errors, since the IRS generally corrects these automatically. When you fill out the form, check the correct box on the top of Form 1040X for the year you’re amending. Also, do not file your amended return until after you receive your original refund if you are filing for an additional refund.
You can obtain Form 1040X and the Instructions for Form 1040X from IRS.gov/form1040x. This IRS website was created especially for anyone who needs the form or wants to learn about them. You can also obtain any additional forms or schedules that you might need to amend at “IRS: Forms & Publications." Select the forms or schedules for the tax year you're amending; not the year you’re submitting the 1040X. Include these completed forms or schedules along with the 1040X to avoid processing delays. Also send along any payment due to limit interest and penalty fees. You can submit the form by mail only; it cannot be filed electronically.
Diane Dilov-Schultheis has been writing professionally since 2000. She is a food and travel writer who also specializes in gaming, satellites, RV repair, gardening, finances and electronics. She is a member of the Society of Professional Journalists and has been published online at the Travel Channel and Intel.