I don't think filing taxes is on anyone's list of favorite things to do. The process can be extremely complicated and frustrating for some. As a former accountant, I used to help people prepare their tax returns. Every once in a while, a client would forget to provide an important piece of information. Or sometimes a client wouldn't find the information until after their original return was filed.
So what should you do if you forget to add something important to your return? You may have to file an amended tax return. As always, make sure you consult with your tax professional before doing so, as each person's situation is unique.
When Can You File an Amended Tax Return?
People usually amend their tax returns to claim an additional tax refund. That said, you can also file an amended tax return if you have additional income that would result in owing more income tax.
If you owe additional tax, make sure to file as soon as possible in order to avoid any penalties or accrued interest.
In order to qualify to amend your return for an additional refund, you must file an amended tax return called a Form 1040X. You must file within one of two time periods (whichever is longer):
One time frame is within two years after you paid the tax. The other is within three years of the date you originally filed the tax return for that year. If you filed before the original due date, you can use the due date as your deadline. If you filed an extension for your tax return that year, the extended time you used until you filed counts as well. However, if you filed before your extended due date, you can only use the date on which you actually filed.
Why File an Amended Tax Return?
According to the IRS, you should file an amended income tax return if your income, deductions, credits, filing status or dependents were filed incorrectly on your original tax return. For instance, if you found out you forgot to add your student loan interest deduction when you originally filed your tax return, you will likely want to file an amended tax return.
But if you simply discovered you made a math error or forgot to attach a schedule to your tax return, you won't have to file an amended return, as the IRS will either correct the error or request the missing schedule.
How to File an Amended Tax Return
Filing an amended return usually isn't too difficult. Most people do so using the same tax preparation method that they originally used. If you used a CPA, it would make sense to go back to that CPA to file the amended return. The same goes for using tax preparation software. Both preparation methods may result in additional fees from your CPA or tax preparation software. If you're brave and filed your tax return yourself using pen and paper, you'll want to file your amended return the same way.
To file an amended tax return, you'll need to use IRS Form 1040X. The form has many of the same items found on Form 1040, but instead of one column of numbers, Form 1040X has three. The IRS requests you input the original tax return numbers, the new numbers you wish to file as well as the change between the original return, and the new numbers. Form 1040X will also ask for the reason you made changes to your tax return. If the changes on your return include changes to other tax forms you filed, you'll need to include those as well. Finally, remember Form 1040X allows you to amend only one tax year at a time. If you need to amend more than one tax year, you'll need to file more than one Form 1040X.
For more information on how to file an amended tax return, read the instructions for Form 1040X on the IRS website or consult a tax professional.