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Whether the mistake means you owe more tax or you're entitled to a bigger refund, the IRS provides second chances to get your tax return right.
This X-file is normal
For a tax form, the 1040X is pretty easy. Basically, the IRS wants to know what you originally reported, what your revised numbers are and why you are making the changes.
The form helps with these common corrections:
- Adding or subtracting personal exemptions in case there's some confusion about whether you properly counted someone as a dependent.
- Changing your filing status from single to head of household, such as in the case of a new divorcee with kids who could've gotten a larger standard deduction.
- Changing from married-filing-separately to married-filing-jointly to get tax breaks you wouldn't otherwise get. But changing from joint to separate filing after a return's deadline has passed is not allowed.
Form 1040X filing tips
- File a separate Form 1040X for each year you are amending.
- An amended return cannot be filed electronically; you must use snail mail.
- Mail each form in a separate envelope.
- Be sure to enter the year of the return you are amending at the top of the form.
- Explain on the back of the form the specific changes and reasons for each.
- Attach any forms or schedules affected by the change.
- Federal 1040 changes could affect your state taxes. Your state tax office will have information on how to correct your state tax return.
When the IRS benefits
If you made a simple addition or subtraction mistake, there's no need to amend the return. The IRS says its computers will detect the error, notify you and adjust your return automatically.
But if it's something bigger – say you overlooked a Form 1099 for $1,500 you got from a freelance house-painting job — and you catch and correct it first, it could save you from paying even more to the IRS.
The IRS may not penalize you for this honest mistake, but it sure will collect some interest on the proper amount you didn't pay on time in the first place. The sooner you correct the error, the less interest you'll pay.
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Time limits on corrections
The IRS generally gives taxpayers three years after the original return's filing date to make changes with a Form 1040X. If you filed early, you get three years from the return's due date to correct any errors.
Your timetable on amending a return changes a bit, however, if you didn't pay all the tax you owed with your original filing.
If you filed and owed money, you have two years to amend the 1040 from the date that you finally paid your tax bill.
For example, let's say you filed your 1040 on April 15, 2015, and paid $400 of the $500 you owed. You paid the final $100 (plus penalties and interest) on Jan. 10, 2016. You have until Jan. 10, 2018, to amend the original filing instead of the usual three years (until April 15, 2018) you would have been given if you'd paid your taxes in full and on time.
If, however, the two-years-since-payment date arrives after the standard three-year time limit, the IRS says you can amend your return using the deadline that comes later. In the earlier example, let's say you finally paid your tax bill on June 10, 2016. That would give you until June 10, 2018, to amend the return, almost two months longer than the original three-year amending option.
Similarly, if you paid your taxes late, but not that late (say, in our example, on Aug. 10, 2015), and the three-year grace period from the original filing date provides you more revision time (which it would, since April 15, 2018, is later than Aug. 10, 2017), you can take it.
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Can't do it electronically
Even if you regularly e-file, you'll have to send in a paper Form 1040X. The IRS is not yet equipped to handle this form electronically, though it will certainly accept your payment electronically. Be sure to pay attention to the mailing addresses in the form's instruction book. Amended returns don't always go to the same IRS service center that processes regular returns.
Keep in mind that it takes longer — from eight weeks up to 16 weeks — for the IRS to process an amended return. You can use the Where's my amended return application on the IRS website to track its status.
What tax bracket are you in? Bankrate's calculator can help you figure it out.