Filing a tax return isn’t anyone’s idea of fun. Even as a CPA, it isn’t a task I enjoy. Unfortunately, taxes are complicated and humans aren’t perfect. That means it is entirely possible to make a mistake on your tax return. Other times, you receive a tax return document, such as a 1099-MISC or a corrected W-2, after you file your return.
If any of these things happen, you may need to update your tax return with the IRS to correct it. You may need to send in an amended tax return to fix the error or the IRS may correct the error itself. Here’s what you should know.
How to amend a tax return
Amending a tax return is surprisingly straightforward. To amend a return, you’ll need to use Form 1040-X.
Step 1: get organized
Whenever you’re preparing a tax return, it’s good to start by getting organized. This way, the process is as painless as possible. Start by gathering all of the information you’ll need to file your amended return. In general, this is your original tax return and any new documents that resulted in the changes you’ll be making on your amended return. These documents could include:
- Corrected W-2s.
- Corrected 1099s.
- Other corrected tax documents.
It may also include documents you simply forgot to include, such as a 1098-T for tuition paid. You may need more than just tax forms when amending your return, though. If you forgot to claim tax credits, you’ll need any supporting documentation for the tax credits you want to claim. Once you’ve gathered your documents, you’re ready to move to the next step
Step 2: determine how you’ll amend your return
When you’re ready to amend a tax return, you have a few options. You can fill out the forms yourself and send in a paper amended tax return. If you’re going to do this, print out Form 1040-X from the IRS website. You may want to download or print out the instructions for this form, too. Most people don’t have the patience for this, though.
Other options include using tax return software, such as TurboTax or H&R Block, or using a local tax preparer. Each has its benefits and drawbacks. The software fills out the forms based on the information you provide, but doesn’t offer a personalized experience. Visiting a local tax preparer can give you answers to your questions immediately and even advise you of other tax-saving opportunities you may have missed.
Step 3: start preparing your amended return
Next, it’s time to start preparing your tax return. If you’ve decided to do it yourself, the good news is the form isn’t terribly difficult to understand. In fact, the form uses much of the same information you’ll find on your regular Form 1040. If you have questions, refer to the Form 1040-X instructions you secured earlier.
The amended return form features a three-column setup.
- In the first column, you input the information you reported on your original tax return.
- In the right column, you put the new corrected amount for each line item.
- In the middle column, you list the difference. (Increases are positive numbers and decreases should be placed in parenthesis).
You then fill out the information related to your new refund or tax you owe based on the amended return. You’ll also need to explain why you’re making changes to your return in Part III of Form 1040-X.
Step 4: double-check your return for accuracy
When you’re filing an amended return, the last thing you want to do is make another mistake and have to amend your return again. Carefully look over the return and make sure you input the information correctly. Make sure the left column matches your original Form 1040 you filed. Look for any additional tax opportunities you may have missed. Then, double-check your math to make sure there were no math errors made.
Step 5: file your return
If you use a tax preparer to help you fill out this return, you may be able to e-file amended tax returns for tax years 2019 and forward. Amended returns for tax years 2018 and prior must be paper-filed.
TurboTax offers e-filing amended returns for years 2019 and forward at the time of this writing. They also support paper preparation for amending qualifying 2018 and prior tax returns.
If you have a state income tax return that uses federal income tax numbers, you may have to amend your state income tax return, as well. Check the tax forms for your state to see what you have to do to amend that return. H&R Block can help you amend both your federal and state tax returns at the same time. Unfortunately, they only support paper filing amended returns at the time of this writing, even for tax years 2019 and forward.
Common tax return mistakes to be aware of
Mistakes on tax returns are more common than you’d think. Some of these mistakes include:
- Including the wrong Social Security Number (I’ve done this).
- Forgetting to include your Social Security Number.
- Misspelling your name.
- Listing the incorrect filing status.
- Simple math errors for hand-filed returns.
- Mistakes with tax credits or deductions.
- Wrong bank account numbers.
- Unsigned tax forms.
These are just the mistakes the IRS commonly catches. You can also make other mistakes.
You may file your tax return before receiving all of your tax return documents. While companies are supposed to send most tax documents like W-2s and 1099s by the end of January, sometimes they send these documents out late.
Companies can also make errors when filling out forms. If they issue a corrected tax form after the deadline, it will impact your return even if you’ve already filed it. Filing your tax return early to claim a refund may mean you don’t include these on your return.
You could also forget to take a tax credit or tax deduction you qualify for, as some tax credits aren’t as well known as others. Most people know to take the child tax credit and earned income tax credit if they qualify. However, some people may not know about lesser-known credits or deductions, such as the saver’s tax credit.
Do you need to amend your return?
Not all mistakes require filing an amended tax return. For example, the IRS sent me a letter when I filed my tax return with the wrong Social Security Number. They told me they had replaced the wrong number I included with my correct Social Security Number. They said if their correction was right, I didn’t need to do anything. It was, so I didn’t have to file an amended tax return.
In current news, the IRS commissioner recently announced that people who reported unemployment income but filed before the recent tax law changes shouldn’t file amended returns to exclude the $10,200 of unemployment income now allowed. The IRS believes they will be able to automatically include this on eligible returns already filed and automatically refund the difference.
Unfortunately, the IRS can’t automatically correct all errors. Sometimes, the IRS doesn’t know the error existed. Other times, the IRS doesn’t have the ability to fix the mistakes. In these cases, you have to file an amended return.
If the error results in you owing more taxes, you could hope the IRS doesn’t catch your mistake. That’s not the right thing to do, though. When the IRS sees your error, you get hit with interest and penalties for the entire time the error was outstanding after filing your return. To minimize the penalties and interest, you should file an amended return as soon as possible if it results in owing more taxes.
If the error or mistake results in you receiving a refund, you should file as soon as possible. This way, you can start the long process to get your refund.
What tax returns can you amend?
Not all tax returns can be amended, which stinks if you find you messed up and could have received a bigger refund ten years ago. Technically, claiming a credit or refund using an amended return is limited to tax returns with a due date within the last three years.
This three-year deadline includes extensions, but only if you used them for the year in question. In this case, the period ends when you filed your return, not the extended deadline. You can also amend any tax return within two years from the date you paid any tax owed based on the date you paid the tax. Certain outlier situations exist that may allow filing other amended returns. For instance, people in a federally declared disaster area may have more time.
Checking your amended tax return status
Amended tax returns don’t process anywhere near as fast as a regular tax return. For many, this is frustrating, especially if you’re expecting a refund.
The IRS says it may take up to three weeks for the return to show up in their system. Then, it may take an additional 16 weeks to be processed.
Thankfully, you can check on the status of your amended tax return with this IRS tool. You need the following to be able to check the status of your return:
- Social Security Number.
- Date of birth.
- Zip Code.
Amending a tax return isn’t tricky, but you may be able to claim an additional refund or stop penalties and interest from accruing further. If you don’t feel confident about filling out the paperwork and filing the return yourself, you can use software to do it for you.
TurboTax and H&R Block are two commonly used options, but in-person tax preparers can help you, too. When you file your amended tax return, remember the process is slow. Don’t count on getting a refund from an amended return quickly or you’ll be sorely disappointed when it takes months to come in.