By Bonie Montalvo
If you realized that you made mistakes on your tax return, you can fix these mistakes or omissions by filing an amended tax return, Form 1040-X, Amended U.S. Individual Income Tax Return. Errors can include failure to claim a significant deduction, checking the wrong box as to your filing status, making a typo in entering your wages, or receiving amended tax forms, such as Forms 1099 or Form K-1, after you file.
Correcting the error may result in obtaining a higher refund or lowering your tax due. While there is not a fee to amend your return, if your amended return reveals that you owe more in taxes, you are required to pay that additional amount, and could potentially face interest charges and penalties if there is additional tax due.
Should You Amend?
Whether to amend your return depends on the type of error or omission. For example, you do not need to amend your return for math errors or missing forms, since the IRS will automatically correct those for you. If you forgot to attach tax forms, such as a Form W-2 or Form K-1, the IRS will contact you requesting such forms.
Errors that call for an amended return include, incorrectly reporting your tax filing status, misreporting income, forgetting to claim credits or tax deductions, claiming wrong number of dependents, and so on.
Sometimes, correcting an error can help you obtain a larger refund or can help you reduce your tax liability. There are a number of credits and deductions that could help you lower your tax bill. If you are eligible for one and don’t claim it, you could be leaving money on the table. Filing an amended tax return could allow you to claim that money.
Sometimes correcting an error results in a higher tax liability. If there is a legitimate error, and you don’t correct it, the IRS may impose higher penalties once the error is found. For example, by law, employers and businesses are required to send all income statements such as W-2s and 1099-MISC to the IRS, if you do not include the information matching these statements in your return, the IRS will easily catch the mistake via its computer software.
For further guidance, use the IRS’s, Should I File an Amended Return? Tool, on their website IRS.gov, once there you will answer a set of questions that will help you determine if you should file an amended return.
Amending Your Return
Once you have determined that you need to amend your return, take the following into consideration:
A Form for Each Year. If you are amending more than one tax return, prepare a 1040X for each year, and mail each return in separate envelopes.
Check You State Return. If you are changing your federal return, you also may need to change your state return.
When to File. There is a three-year time limit to file an amended return. You usually have three years from the date you filed your original tax return to file Form 1040X to claim a refund. For example, if you want to amend your tax return for 2018, you would have until April 15, 2022 to amend your return— because that’s three years after the April 15, 2019 due date.
Payment with Return. If after amending your return you owe more tax, submit payment with Form 1040X; this will help avoid penalties and interest. If you can’t pay the full amount, you can ask the IRS for an installment agreement. Under an installment agreement, you can pay all or part of the tax you owe in monthly installments. However, even if the IRS grants you an installment agreement, you will be charged interest and may be charged a late payment penalty on the tax not paid by the due date of your return.
Tracking Your Amended Return. You should generally allow 8 to 12 weeks for Form 1040X to be processed. However, in some cases, processing could take up to 16 weeks. Use the IRS’s Where’s My Amended Return tool on IRS.gov to track the status of your amended return.
This Article does not constitute legal advice and may not be relied upon as such. Each individual’s facts and circumstances are different. If you have any questions regarding your particular situation, please consult with legal counsel.
Bonie Montalvo practices in the areas of estate planning, business succession planning, tax planning, and not-for-profit law. Ms. Montalvo has her LL.M. in Taxation from the University of Florida and is fluent in Spanish.
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