Amend a Federal Tax Return

The Internal Revenue Service (IRS) allows anyone to make an adjustment or change to an already filed tax return. You can change a tax return if you have had a change in dependents, income, credits, filing status, or deductions since you filed. A very common reason is receiving a tax document after you have filed your return because the information on that document wasn't included in the initial return. If you follow a few simple steps, you can learn how to amend a federal tax return.

Steps

Preparing to Amend the Tax Return

1. Check the limitations. When you find that you need to amend a tax return, you need to make sure the statute of limitations on filing one hasn't run out. The statute of limitations, or time allowed for the action, on getting a refund from an amended tax return is three years. That means if you're filing an amended tax return because you're hoping to get an additional refund, the cutoff time is three years after the original return was filed. Wait longer than that and you won't get a refund.
   • If it's been more than three years since you filed the original return and you owe money to the IRS, you should still file an amended tax return. The IRS can audit your returns back as far as six years, although the customary audit only goes back three years.
   • If the IRS needs to go back more than three years in an audit, they should ask your permission to do so. If you have nothing to hide, you should give them permission.
   • There is no statute of limitations on tax fraud or evasion. If you think there may be reason for the IRS to consider your returns to be fraudulent or evasive, you may want to amend returns from further back.
   • For example, if the IRS believes you honestly and reasonably did not realize a portion of your Social Security was taxable based on your earned wages, this will be considered an honest mistake. On the other hand, if the IRS believes you intentionally did not report income you earned from sources that did not also report, this could be fraud or tax evasion.
2. Get the right form. To file an amendment to your tax returns, you need to get Form 1040X, also called the Amended U.S. Individual Income Tax Return. Form 1040x will allow you to make changes to Forms 1040, 1040A or 1040EZ. Whether you owe money to the IRS or you're hoping to collect more of a refund, you'll only ever need to use one 1040X form per tax year to file amendments.
   • This is also true if your tax return was extremely complicated when you originally filed it.
   • You can call the IRS and have a 1040X sent by mail or visit its website to get the form.
3. Compile the relevant documents. Once you look at the 1040X form, you need to collect all the relevant forms that you need to include with your 1040X. Any additional forms or worksheets that are needed for your particular situation should also be attached. For example, you received another W-2 after you had already filed your original tax return. If this happened, you'll want to include a copy of that W-2 when you file your amended tax return.
   • If your changes included changes to itemized deductions, you should include a new Schedule A that reflects the changes you made.
   • You will have to complete new tax returns, either the 1040, 1040A, or 1040EZ and all appropriate schedules for your situation, for the year being changed. These have to be submitted with your 1040X.
   • Be sure to keep copies for your files.

Understanding the 1040X Form

1. Read the instructions on the 1040X. You should read through the entire 1040X Form instructions before you file it. This is a separate document to the form itself. You have to make sure you follow the 1040X instructions for your particular situation so you can complete the form exactly like you should. The 1040X instructions include explanations of what each line signifies and what you need to do.
2. Know the exemptions. The 1040X instructions explain each possible reason for filing an amended tax return. The instructions explain that you may need to file this form if you have put incorrect information about the number of dependents you have. The form breaks down the different kinds of exemptions, which are the number of people for whom you can claim personal deductions.
3. Learn about credits and special rules. The 1040X instructions also discuss how you need to file a 1040X if there is any return where you claimed or didn't claim certain tax credits. It provides descriptions of tax credits such as the Earned Income Credit and Child Tax Credit. These are the amounts of money that are applied toward any payments or added to your refund. It also explains special situations, such as tax provisions that have special rules.
   • These include additional medicare tax, carryback provisions, and deceased taxpayers.
4. Understand the penalties. The 1040x form instructions lay out any penalties, which are any amounts the IRS will assess for failure to comply with the tax code. Penalties are levied for late payment of taxes, erroneous refund claims or credits, frivolous returns, as well as for negligence, understatement, and fraud.
   • Penalties vary, but are usually 20% - 25% of the return, and can include fees of $5,000 for filing a frivolous return.
5. Consider the interest on late payments. The IRS will charge interest on taxes that are late, even if you filed for an extension. An extension only extends the deadline for filing the return, not paying the amount due. If you owe taxes, your payment is still due on April 15, whether your extension is requested or automatic.
   • The IRS will also charge interest on penalties you incur. Interest rates are variable and may change each quarter, but are usually around 3% of the amount owed per year, with interest compounded daily.

Filling Out the Amendment Form

1. Fill out the amended tax form. Now that you have read the instructions and understand the form, you need to fill out the form. Place the tax year at the top of the form, then start filling out your amendment on the 1040X form according to the instructions. When doing this, make sure you have your original and corrected 1040, 1040A, or 1040EZ form for the year in which you are filing.
   • This is important because tax calculations change from year to year. You'll need to use the correct tax calculations for the year that you are amending. The IRS keeps prior year instructions, tax tables, and forms on its website.
2. Understand the layout of the form. The 1040x Form has three columns. Follow the line-by-line instructions provided by the IRS in the instructions. Those instructions will tell you where to find the information on any of the three forms for a variety of years. If the instructions for a particular line do not apply to your situation, either leave it blank or enter zeros.
   • Column A is the amount on the original tax return. Column C is the amount for the corrected amount. Column B is the difference between columns A and C.
   • Subtract columns C from A or vice versa to get column B.
3. Fill out lines 1-3. On the 1040X, line 1 is for adjusted gross income, line 2 is for total deductions, and line 3 is the difference between the two. Enter your adjusted gross income amounts on line 1 in the appropriate blanks for columns A, B, and C. If you are not changing your adjusted gross income, columns A and C should be the same, and column B should be 0.
   • Enter the total deductions to be taken on line 2 in the appropriate blanks for columns A, B, and C. If you are not changing your adjusted gross income, columns A and C should be the same, and column B should be 0.
   • Subtract the numbers on line 2 from the numbers on line 1 and enter the results on line 3.
4. Input lines 4-5. On the 1040X, line 4 is for exemptions and line 5 is the difference between line 3 and line 4. Enter the number of exemptions being claimed on line 4 in the appropriate blanks for columns A, B, and C. If you are not changing your adjusted gross income, columns A and C should be the same, and column B should be 0.
   • If you are making changes to this, you will need to complete Part 1 on Page 2, and enter the amount from line 29 in line 4C.
   • Subtract line 4 from line 3, and enter these amounts on line 5. If your original taxable income was a negative number, enter that negative number instead of the 0 entered on the original return.
5. Calculate your tax liability. Line 6 is where you put the kind of tax liability you have. Do this by using the instructions and tax table for the year you are amending. Use the instructions for the 1040X form to determine abbreviations for various types of tax calculation. Enter the appropriate abbreviation in the blank on line 6.
6. Enter lines 7-9. Line 7 is for nonrefundable credits, line 8 is the difference between line 6 and 7, and line 9 is for healthcare costs. You need to enter your total nonrefundable credits on line 7 in the appropriate blanks for columns A, B, and C. If you are not changing your adjusted gross income, columns A and C should be the same, and column B should be 0. Subtract line 7 from line 6, and enter these amounts in line 8. If the result is a negative number, enter 0.
   • In line 9, enter your healthcare individual responsibility amount in the appropriate blanks for columns A, B, and C. If you are not changing your adjusted gross income, columns A and C should be the same, and column B should be 0.
7. Fill out lines 10-17. Lines 10-17 deal with taxes withheld, payments made, and credits received. Enter any other taxes not already claimed for which you are responsible in line 10. To get line 11, add lines 8, 9, and 10. Enter any taxes that were withheld from your income in line 12. Enter any estimated payments that you claimed on your original return or amounts you applied to that return in prior years on line 13. For line 14, enter your Earned Income Credit.
   • Enter the total amount of any other refundable credits on line 15 and check the boxes that correspond with the form on which you calculated that credit.
   • Enter any amounts you paid with an extension request, excluding interest, penalties, or convenience charges on line 16.
   • Add lines 12 through 16 plus any amount that was previously paid with Form 8689, which is the Allocation of Individual Income Tax to the U.S. Virgin Islands. Enter that total in line 17. Enter “USVI” and the amount on the dotted line to the left of line 17 if you used 8689.
8. Write in lines 18-19. For line 8, enter the amount you reported as overpaid on your original return or the corrected amount provided by the IRS. To find line 19, subtract line 18 from line 17. The figure in line 19 will be used to fill in the next few lines.
9. Complete lines 20-21. Line 20 can be calculated multiple ways. If the number in line 19 is negative, treat it as a positive and add it to line 11C. Enter that number in line 20. If the number in line 19 is positive and less than line 11C, subtract the number in line 19 from line 11C and enter that number in line 20. This is the amount you owe with this amended return. If the number in line 19 is greater than line 11C, enter a 0 in line 20.
   • If the number in line 19 is greater than line 11C, subtract the number in line 11C from the number in line 19 and enter that number in line 21. This is the amount that will be refunded to you.
10. Decide where your refund should go. Lines 22-23 deal with the transfer of your refund. The amount of line 21 that you want refunded to you should be entered on line 22. The IRS will send you a check for this amount plus any interest owed to you. The amount from line 21 that you want applied to future years should be entered on line 23. Enter the tax year to which you want it applied in the appropriate blank.
    • In Part II, check the box that applies if either you or your spouse now want $3 to go to the Presidential campaigns, but previously did not. If this is not the case, leave Part II blank.
11. Claim any dependents. In line 24, enter the number of yourself and your spouse. This should be a 1 or 2. If one or both of you can be claimed on someone else’s return, you cannot count that person. Enter the number of dependent children who lived with you in line 25. In line 26, enter the number of dependent children who lived with the other parent from whom you are divorced or separated. The number in line 27 should reflect the number of other dependents that you can claim.
    • Add lines 24 through 27 and enter that number in line 28.
    • Multiply the number on line 28 by the amount shown in the instructions for line 29 for the year you are amending and enter that number on line 29.
    • In box 30, list each dependent’s first and last names, social security numbers, and relationship to you. Also, check the box in 30(d) if this child will be used for the child tax credit.
12. Finish the form. In Part III, describe the changes that occurred. This would just be a normal description, such as “received a late W2” or “included a major deductible expense that was accidentally omitted from the prior return”. Both you and your spouse, if necessary, must sign and date the return. By signing the form, you are swearing that the information included is true and correct to the best of your knowledge.
    • Knowingly providing inaccurate information can lead to criminal punishment, including perjury.

Finishing the Amending Process

1. Attach necessary forms. Now that the form is filled out, you need to attach copies of any necessary forms or schedules to the amended tax return. These would be the corrected forms you completed and used in order to fill in the 1040X. Make sure to include any tax forms that give the IRS a clearer picture of whatever changes you are making.
   • If you owe taxes, enclose a check or money order made payable to the United States Treasury for the amount due.
2. Complete other 1040X Forms. After you have completed one 1040X Form, you need to complete another 1040X Form for each tax year for which you need to amend. If you need to amend several years of tax returns, you can't use one form to file separate amendments. You need to use one 1040x form for each corresponding tax year.
3. Mail the forms. Now that you have completed all the forms, you need to mail the amended tax return and all the supplemental paperwork to the IRS. You can fill out the 1040X Form online with tax preparation software such as Quicken or TurboTax. You can also fill it on the IRS's fillable forms section. However, you must file a physical copy with the IRS, so print out copies of the form once you fill them out online. The IRS does not accept electronic copies of 1040X Forms.
   • If you are filing 1040X Forms for multiple years, you must mail each return in a separate envelope.
   • Check the IRS website for information on where to send your completed 1040X Form depending on your area.
   • Be sure to retain copies of everything you send to the IRS for your records.
   • You must make sure that the IRS accepts your amended return. Generally, the IRS takes 8 to 12 weeks from the date received to process the changes.
4. Make payments. Make sure to pay the new tax amount you owe as soon as possible. This limits the amount of interest and penalty charges. If possible, you should include your payment with the 1040X. If you do not, the IRS will charge interest on the amount due. Under some circumstances, they may also charge penalties. If you carry an unpaid balance with the IRS and do not make arrangements to pay, you may be subject to garnishment of future returns, bank accounts, and seizure of certain assets.

Tips

• If you're filing a tax return for the current year and anticipate tax refunds from the original and amended returns, then delay sending in the 1040X. You should wait until you receive your tax refund either by check or into your bank account. Once you receive the refund, send the 1040X. The IRS sends another tax refund for the difference listed on the amended tax return after the 1040X is processed.
• Typically, the IRS charges interest on any unpaid taxes incurred from the date of the original tax return. The interest is regardless of any tax extensions granted.
• You may have to amend local taxes.

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