Made a Mistake on Your Taxes? How to File an Amended Tax Return
This story has been updated to reflect the 2013 tax year.
Sending off your completed tax return is an amazing feeling. Goodbye to all that work until next year!
That is, until you realize you’ve made a mistake.
Maybe an extra 1099 came in the mail. Or you read one of our many tax articles and found out you missed a huge credit that could save you a couple thou. Ummm, what next?
Mistakes happen. So the IRS has a special form just for you: the 1040X. It’s what you use to file an amended return.
File an amendment if you:
- Claimed a dependent you shouldn’t have, or now realize you can claim a dependent you didn’t
- Need to change your income, like if you forgot to report some freelancing gigs or interest income
- Need to add or eliminate credits or deductions
- Need to change your personal exemptions
- Need to report additional withholding
- Are a same-sex couple who can now take advantage of married, filing jointly status
Don’t file an amendment if:
- You made a math error in adding or subtracting line items. The IRS will correct these for you.
What if you made a mistake that means you owe the IRS more in taxes, but the IRS didn’t notice? Can’t you just let it slide?
Bad idea. Besides the fact that this is tax fraud, if the IRS does discover this, you will have to pay the tax you owe plus interest that has accrued on it. It’s worth it to make sure you’re all buttoned up.
If you filed before the deadline (which is usually April 15th), then you have three years from the deadline date.
So, let’s say that back when you filed taxes in 2011, you failed to claim a deduction for closing costs you incurred in 2010 (and you realized this after reading our post for homeowners). You can file an amended return to claim that deduction up until April 15th 2014, which is three years after the April 15th, 2011 filing deadline.
Let’s say you had a similar situation as above, but you couldn’t pay your taxes outright. You ended up paying the IRS in installments and finally paid off the last of your taxes in June 1, 2012. The IRS gives you more leeway here, giving you two years from when you paid off your taxes or three years from the filing date—whichever is longer—to file an amendment. So in this case, you can file an amendment up until June 1, 2014, which is two years after you finished paying for your 2010 taxes. (Find out what to do if you owe taxes and can’t pay.)
You can file an amendment at any time, but the IRS prefers that you wait until you have received the refund that came from your original return before filing the amendment. (You can cash that check.) Once you have that, you can get started.
You will need to fill out a full 1040, regardless of if you filed a 1040A or 1040-EZ originally. (Learn the differences between these forms.) The IRS carefully reviews amended returns, so take extra care to prepare this return accurately—it helps to have your original 1040 form in front of you while you do so.
The bad news is that even if you e-filed your original return, you will need to file the new 1040 and 1040X on paper. Some online tax preparers like H&R Block allow you to fill this form out online, but you will still need to print it out to send it in.
Include only supporting documents that changed or are new, and use a highlighter to point out which figures are different or are important for the IRS to look at. Mark your corrected 1040, or other corrected tax documents and schedules, “As Amended.” Also take this opportunity to review everything else again too, in case you missed something else. It would be worth your time to read our other articles on taxes to see if you missed any credits, took the wrong filing status or something else.
Once you have your new 1040 filled out, you will use that to fill out the 1040X, which summarizes what is on your 1040. You will write down the original amounts, the new amounts and the difference between them.
On the back of 1040X, you will explain the changes. Include why those changes are being made, what the numbers are, and exactly where to find them, line by line. Be succinct but complete. If you need extra space, you can type up the explanation and attach it to your 1040X.
Make sure to put the year for which you are preparing the amended return at the top, which is the tax year before the year you filed. So if you filed the return in April 2011, that means it is for tax year 2010, which is what you should put down. If you are amending more than one year, fill out a separate 1040X and 1040 for each year, and mail it in a separate envelope.
Like we said before, the IRS will look at this 1040 much more closely, so go through it carefully looking for errors.
Include any supporting documentation. You should mail it to the appropriate center listed on the 1040X instructions. Keep in mind that you will, most likely, also need to file an amended state return. You should receive confirmation within 8-12 weeks. Longer, if the IRS is in its busiest times for processing returns.
If you will now get a bigger refund than you did the first time you filed, you’ll have the option to either get a check for the difference, or apply that amount to next year’s tax bill. If you underpaid, then you will have to pay the difference. If you are filing your amendment after the due date for that tax year (i.e. April 15, 2014 for the 2013 tax year), the IRS charges interest and penalties on those unpaid taxes, but they are extremely difficult to calculate on your own. So send the amount you underpaid, and wait for the IRS to send you back a bill which will state what you owe in penalties and interest, which you can then pay.
Need more time to file your taxes? We show you how.
If you’re a freelancer or plan on freelancing this year, read this post now to save yourself money and time.