Here’s a taxpayer’s worst nightmare: Discovering you made a mistake on a tax return you’ve already filed with the IRS. What should you do?

Don’t panic.  You can always amend your return. But first, make sure you really want to do so.

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When should you file an amended tax return?

You never have to amend a tax return you’ve filed with the IRS. This is so even if you later discover you underpaid your taxes due to mistakes in your filed return. It’s up to the IRS to catch such mistakes. You have no obligation to report them to the IRS by filing an amended return.

However, the IRS is sure to catch some types of errors — for example, failing to include income reported to the IRS on a Form 1099. Fixing such errors now by filing an amended may avoid all or some fines, interest, and penalties.

You don’t have to amend your return if you discover that you made a simple math error. These will be automatically corrected by IRS computers, followed by a notification of the change sent by mail.

Also, you don’t be quick to file an amended return if you discover you forgot to attach a Form W-2, left off a tax schedule, or made a similar relatively minor. The IRS can probably process your return anyway or will request you provide the omitted forms if they’re needed.

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When should I amend a filed tax return?

When should you seriously consider amending your return? If you discover you paid substantially more tax than you had to – for example, because you forgot to claim a deduction or tax credit entitled to you. Filing an amended in such cases will result in a refund.

However, keep in mind that when you file an amended return you must correct every mistake you discover in the return. You can’t choose to correct only those errors that benefit you. You also have to correct errors that increase that taxes you owe.

Also, filing an amended tax return increases the chances of an IRS audit for the year involved. The more money involved, the more likely of an audit.

If you’re not sure whether to amend, consult a tax professional for advice.

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Time limit on amending tax returns

You can’t wait forever to file an amended tax return. The general rule is that you can file an amended tax return until the later of:

  • three years after the date you filed the original return (April 15 or October 15 if you obtained an extension to file), or
  • two years after the date you paid the tax.

close up view of U.S. 1040 tax form

If you filed your original return early, your return is considered filed on the April 15 due date. For example, if you filed your return on March 1, 2018, it is considered filed on April 15, 2018, for purposes of filing an amended return.

However, if you obtained an extension to file until October 15,  but you filed earlier, your return is considered filed on the actual filing date. For example, if you received an extension until October 15, but filed on July 1, your return is considered filed on July 1.

After the time limit expires you can’t file an amended return for that year.

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How to amend your return

You amend your income tax return by filing IRS Form 1040X, Amended U.S. Individual Income Tax Return. When you file Form 1040X to obtain a refund of taxes you’ve already paid, then you are calling for a “claim for refund.”

If you need to amend more than returns from more than one year, you must file a separate Form 1040X for each year.  Make sure you check the box to show the tax year that you are amending on Form 1040X.

Form 1040X has three columns.

  • Column A is where you list the figures from your original return.
  • Column B shows the changes you are making
  • Column C shows the final corrected figures.

There is also an area on the back of the form where you should explain the changes and the reasons for them. If the changes involve other tax schedules or forms, attach them to your Form 1040X. Failure to do this will cause a delay in processing.

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Seek professional tax help

Completing Form 1040X is a complicated process. You may need to get a tax professional to help you.

If you’re amending your previous year’s tax return and expecting an additional refund for that year, you should wait until you receive your original refund for that year. You can go ahead and cash the first refund check as soon as you receive it. Of course, you can file your amended return immediately if you were not entitled to a refund on your original return.

If you owe the IRS more taxes, you’ll likely also owe interest and penalties on the amount that was unpaid. You can calculate these yourself and pay them with your Form 1040X. If you don’t, the IRS will bill you for them.

How do I submit Form 1040X?

You must mail or hand deliver Form 1040X to the IRS. You can’t file it electronically. If you mail it, send it by certified mail, with postal return receipt requested. This will let you know when the IRS received it. If you amend your returns for more than one year, mail each 1040X in a separate envelope. The 1040X instructions show where to mail the form.

You may also hand deliver the form to the IRS service center where you file your tax returns. If you do this, be sure to get a stamped copy as your filing receipt.

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How the IRS processes refund claims

The IRS doesn’t like paying back money to taxpayers. When you file a Form 1040X claiming that you paid too much tax for the year involved, your tax return for that year will receive extra special attention.

An IRS employee will pull your return and examine it together with your 1040X to decide whether you’re really entitled to a refund and, if so, how much. Your claim may be denied or accepted as filed, or the amended items may be audited.

If a claim undergoes an audit, the procedures are almost the same as in the audit of a regular tax return. Moreover, the IRS has the option of extending the audit to your entire tax return, not just the amended items.

You should receive your refund, if you’re entitled to one, in up to 16 weeks. Alternatively, you can apply all or part of your refund to your current year’s tax.

However, reduction of your refund come from amounts you owe for past-due child support, debts you owe to another federal agency or past-due state income tax obligations. If this happens, expect a notification from the IRS.

If the IRS denies your claim, it must explain why. You have the right to appeal such a denial.

Stephen Fishman

Stephen Fishman

Stephen Fishman is a self-employed tax expert and regular contributor to MileIQ. He has dedicated his career as an attorney and author to writing useful, authoritative and recognized guides on taxes and business law for entrepreneurs, independent contractors, freelancers and other self-employed people. He is the author of over 20 books and hundreds of articles, and has been quoted in The New York Times, Wall Street Journal, Chicago Tribune, and many other publications. Visit Fishman Law and Tax Files for more information on his work.
Stephen Fishman