Want to Know How to File an Amended Tax Return?

Today, we’re going to walk through, step by step, how to do it.

Let’s dive right in!

As an accounting firm, we’ve filed our fair share of amended tax returns. And, we wanted to make this post so there is less confusion and stress surrounding the topic.

In today’s post, we’ll be going over when to amend your taxes and the 5 steps to actually amend your taxes.

Additionally, we’ll also discuss how to track your amendment, and 5 tips to get your amendment right the first time.

When to Amend Your Taxes?

You should amend your taxes in the following scenarios:

1. You forgot to claim a tax deduction or tax credit
2. You need to change your filing status
3. You need to add or remove dependents
4. You need to correct your Income

Note that if you are amending a return to claim a tax refund, you must do so within three years from the original filing deadline.

Or, within two years of paying the tax due for that year, if that date is later.

You typically do not need to file an amended return if you made a simple math error as the IRS usually fixes math errors when they process your original return.

An amended return is also not necessary if you forgot to submit a required form or schedule with your original tax return as you will receive an IRS letter with a notice regarding the missing item.

But, if that’s not you, and you do need to amend…

…you can amend to claim a refund within three years from the date they timely filed their original tax return or within two years from the date they pay the tax, whichever is later.

Steps to Take When Filing Amended Tax Return

Step 1: Gather Necessary Documents

This step is important because it will make life easier later.

Grab your original tax return along with any other documents that need to complete the amendment return.

If you don’t have a copy of your original tax return, here are three ways to retrieve it.

1. If you used an online platform to file it, you should be able to log in to the platform used to access a copy of it.

2. If you filed with a preparer, you can ask them for a copy of the filed return.

3. If you want to take matters into your own hands, no matter the situation, you can get a copy of your transcript online or by mail by using the Get Transcript tool on the IRS website.

The transcript provided by the IRS won’t be the complete return, but it should have all the information you need to amend your return.

If you need to add a credit or a deduction, be sure to gather your supporting documents for that credit or a deduction.

If you need to adjust your income, you may need documents that show your income such as a W-2, K-1, or 1099.

Step 2: Gather The Correct Forms

To amend your taxes you will need Form 1040-X. This form can be found on the IRS website.

You will also need any other form that will be changed by your amended return.

For example, amending your tax return because of itemized deductions means you will also need Schedule A also known as Form 1040.

Step 3: Complete Form 1040-X

Let’s point out some things that often trip people up and cause errors when they go to complete Form 1040-X.

The first thing you want to do is indicate at the top the correct year of the return you are amending.

Then, after filling in the personal information you will notice that form 1040-X, has three columns.

This is the second place of confusion for most people so let’s walk through it together.

Let’s look at columns A and C first and then Column B.

Out of order, we know but it will make all the difference in a second. Trust us!

Column A is titled “Original Amount” In this column, you will place the original amounts listed on your original return. You will do this for every row.

Column C is titled “Correct Amount”. In this column, you will place the correct amount. Meaning the amount should have been on your original return. This is where you make your corrects.

Now, Column B is titled “Net Change”. This column represents the difference between columns A and Column B.

So for example, if you have $30,000 in Column A for Adjusted Gross Income and the correct amount is $35,000 which you placed in Column C, then the difference between the two of $5,000 would go in Column B.

We know, it would have been a lot easier for the IRS to make Column C the “net difference”, but what can you do!

Next, we want to point to Part III of Form 1040-X.

In Part III, you should explain why you are amending your return.

You will also need to attach any supporting documentation to go along with your reason and any new or changed forms or schedules.

Step 4: Submit to the IRS

So you completed Form 1040-X and now it’s time to submit it to the IRS.

Now, there are three ways to submit your 1040-X and additional documents.

The first way is to do it online yourself.

The IRS began accepting electronically filed 1040-X forms in 2020 for 2019 and 2020 returns if the original return was also electronically filed.

If you are amending a tax return for 2018 or before, you will need to mail in your return.

To submit an amended return electronically, we suggest using a company called Free Tax USA.

They are extremely affordable and will walk you through the process to amend your return.

The second way you can submit your 1040-X and additional documents is by mail.

You can do this by using the address provided in the instructions on your 1040-X. Check that all fields are completed and be sure to sign and date the form.

The third way is by using an accounting firm like LYFE Accounting to prepare and submit your 1040-X on your behalf.

Step 5: Track Your Amended Return

There are two ways you can track the status of your amended return

You can use the “Where’s My Amended Return?” tool located on irs.gov.

Or, get in touch with them by phone at 866-464-2050.

Note that amended returns take up to 16 weeks to process but you can track the status of your amended tax return three weeks after your file it.

5 Tips to Keep in Mind When Amending Your Return

Tip #1: If you live in a state with a state income tax and amend a tax return, you typically have to amend both your federal and state returns.

Tip #2: If you are amending multiple returns for separate years, use a separate 1040-X for each tax year.

Tip #3: If your amendment includes other tax forms and schedules, be sure to attach them to your 1040-X when you file the form.

Tip #4: If you are waiting for a refund from your original tax return, don’t file your amended return until after you receive the refund.

Tip #5: If you owe taxes as a result of an amended return, pay the tax as soon as possible to limit any interest and penalty charges.

Bonus Tip: Before filing an amended return, be sure your original return has been processed first.

Well, there you have it! A complete guide to amending your tax return.

Again, if you need any help with your tax preparation, tax planning, or tax resolution, get in touch with us today.