Form 1040x
Updated to tax year 2024.
It’s inevitable. You filed your tax returns on time and planned to ignore taxes for another tax year. But you just found a mistake in your federal tax return. What should you do? Do you file a brand new return with the Internal Revenue Service, and tell them that your original return is no longer valid? Do you amend your return to correct it? Do you owe a penalty for making a mistake?
Don’t worry. You can correct your return if you make an error, such as forgetting to include your Form W-2 earnings. The IRS has seen everything. Unless you committed fraud or tax evasion, they wouldn’t hold it against you.
We will walk you through the four Ws (What, When, Why, Where) of amending a tax return and offer suggestions to prevent the need for an amendment.
Why file an amended tax return
You found an error on your original federal return. You entered your Social Security number incorrectly. You checked the wrong box when you selected your filing status. You may have made a mistake when entering your Form W-2 wage. Did you forget to record a charitable contribution or other tax deduction?
Not all errors are created equally. Some errors are worthy of an amendment, while others are not.
Errors worthy of amendment include:
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A substantial noncash contribution
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Additional business deductions
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Income, such as unemployment benefits, that you didn’t know you should report
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A corrected form from your employer, financial institution, or a partnership
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An incorrect Social Security number for yourself, your spouse, or a dependent
Other inconsequential errors are not worthy of amending a tax return. If you find a $20 receipt for a charitable donation or extra mileage for a trip on business, amending your return is not worth it. The IRS will notify you by letter that they have corrected an error. You do not need to file an amended return if you agree with the corrections.
When to file an amended return
Don’t wait! Do not wait to file an amended return. If you need to amend your tax return for more than one year, you’ll need to submit a separate form for each year. Tax filers do not have to amend their tax returns forever. If you paid tax after filing your original return, you only have two years to amend. If you find out that you missed a tax deduction for several years, your only option is to amend the return for the three previous years. You may have realized that you were eligible for the Earned Income Tax Credit but did not claim it. The EITC can be claimed as a tax refund, even if you owe no taxes. If you do not owe taxes, it is pointless to file an amendment for these unclaimed credits. Therefore, if you owed no taxes, there is no use in filing an amendment for these unclaimed credits.
Note
: If your amendment is to claim an additional tax refund, wait until you receive the original refund before filing the amended tax return.
What to file when amending your return
Repeat after us: Amend a tax return, don’t file a new return!Filing an amended federal return may be easier than you think. You don’t need to start all over. You can correct only the forms that have changed. Do not file Schedule A again if you submitted it with your original return. To file Form 1040X using TaxAct(r), log into your account, click on the Filing tab, then click Amend Federal Tax return. If you change your federal income taxes, it could affect your state tax returns. If you have filed Form 1040, 1040SR or Form 1040 electronically and it has been accepted by the IRS you can efile Form 1040X. These instructions will help you create and efile an amended tax return with TaxAct. What if I owe? If I owe money, will I have to pay a fine?
If you find out after the deadline that you underpaid taxes, you could owe both a fine and interest. Pay the tax due immediately to minimize interest and penalties.
However, if you have a good cause, such as erroneous information sent to you, be sure to attach a statement with your amended return and ask for an abatement of the penalty. The IRS will often grant abatements to taxpayers who try to fix problems as quickly as possible. In fact, the IRS can be pretty reasonable.
Note
: Amending your tax return does not increase the risk of being audited.How to avoid mistakes in the future
You can avoid most tax return mistakes by organizing your information before filing your taxes. It is also helpful to start your tax return as soon as possible. It is important to read through your tax return prior to filing. It’s better to file your return on time than pay penalties for filing late, even if you have to amend it later. It’s better to file your return on time than pay penalties for filing late, even if you have to amend it later.
This article is for informational purposes only and not legal or financial advice.
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