Easy Guide to Amending Your Tax Returns
If you receive unexpected mail from the IRS, don’t immediately jump to conclusions about an audit or penalty. Very possibly, the IRS might be requesting a simple amendment or change to your tax return, such as if you miscalculated your total income or forgot to include a W2.
You can also initiate the amendment process yourself if you realize that you made certain types of errors when filing your 1040, 1040A or 1040EZ.
To make your life easier, this guide will give you answers to the top ten questions about amending a US federal tax return.
1. Under what circumstances should I file an amended return?
You should file an amended or updated tax return if you reported any of the following incorrectly:
Filing Status
Changes in status happen for a number of reasons, such as marriage, divorce or new dependents. The IRS offers five different filing statuses:
· Single
· Married Filing Jointly
· Married Filing Separately
· Head of Household
· Qualifying Widow(er) with Dependent Child.
Dependents
Changes here frequently involve children. Also, a common tax return mistake in this category is wrongfully claiming a spouse as a dependent. When filing a separate federal tax return, you’re only permitted to claim an exemption for your spouse if they meet these three conditions:
1. They’re not filing jointly.
2. They had no gross income.
3. They’re not the dependent of another US taxpayer.
Total income
Maybe you recently discovered a W-2 for an odd job or found correspondence about capital gains. Whatever the reason for your error in reporting income, be sure to correct it with an updated tax return.
Deductions or Credits
Many individual taxpayers only learn about certain tax deductions after they’ve filed, although more often they misplace relevant paperwork. Businesses, meanwhile, commonly file updated returns for carrybacks and other credits. The good news is you can file an amendment up to three years after your initial filing date and still receive a refund.
2. When should I NOTamend my tax return?
If you simply made a computational error or neglected to include a tax form with your return, then the IRS will most likely correct your calculations or mail you a request for the missing paperwork. No need to worry about amending your tax return if this is the case.
3. Which IRS form do I use for amendments?
Use IRS Form 1040X to amend your 1040, 1040A or 1040EZ. You can download the 1040X or complete it online and print it, but you cannot submit the completed form electronically. You will need to sign a paper copy and mail it to the IRS.
4. Can I amend more than one federal tax return?
Yes, you can amend federal tax returns for any year, although your eligibility for refunds expires after three years. You should prepare a separate 1040X form for each return and mail each one in a separate envelope.
5. What’s included on the 1040X?
The 1040X is divided into columns for listing your original tax return figures, the adjusted figures and the difference. Another section of the form will ask you to explain the changes.
6. What if my explanation involves supporting documents?
You’re entitled to enclose supporting documents when submitting the 1040X, such as new schedules and changed forms.
7. What if my amendment is for getting an additional tax refund?
If you’ve already submitted your tax return and are expecting a refund because of it, then don’t file an updated tax return until you’ve received the check. You can cash the check right away and then file Form 1040X for your second refund.
8. Can I use the 1040X to pay additional taxes?
Yes, you can pay additional taxes that you owe with Form 1040X. You should pay as soon as you’re able, as penalties and interest may increase every month. If you’re unable to pay the full amount that is due right now, it’s best to inform the IRS of your situation so that you can work out a payment plan with them.
9. How long do I have to file an amended return?
The 1040X includes check boxes for the past four years. However, you need to file for refunds within two years of the date you paid taxes or three years of your original filing date, whichever is later. Of course, if you owe debts that weren’t previously disclosed, you’ll need to pay those as soon as possible and may incur penalties for late payment.
10. When will my updated tax return be processed?
Amended returns are generally processed within eight to twelve weeks.
Conclusion
Submitting an updated tax return is relatively straightforward and need only be done when there’s a change to make in filing your status, dependents, income or deductions/credits. Remember that after filing your updated federal tax return, you’ll likely need to file a new state tax return too. If this seems overwhelming, you can always get the help of a tax professional or use an online tax program that double-checks your work.
About the Author:Bob Goren is an accountant and independent federal tax return advisor in the US.
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