Filing an Amended Income Tax Return with the IRS

Filing taxes can be a long, complex process, especially if you have multiple sources of income or many deductions and credits to take. With so much information to process and calculations to make, it is all too easy to make a mistake. Fortunately, the IRS has a way that you can fix any mistakes on your tax return. Amending your tax return can take some time, but it is well worth it to avoid paying penalties and fees or to get a significant increase in your refund.

You don’t need to amend your tax return for every small error. According the IRS, amending your tax return is unnecessary for math errors or missing forms because they will usually catch these. The IRS will notify you of the error and correct the tax return themselves or ask you to send the missing information. You should amend your tax return if you need to make changes to your total income, filing status, dependents or deductions and credits.

If the amount of income you reported on your tax return is not accurate, you will need to correct it. For example, if you receive a 1099 in the mail after you have already submitted your tax return, you would need to amend your tax return to include the missing income.

In many cases, the IRS will notice that you forgot the 1099 and ask you to correct it, but they may not notice it until after your taxes are due. You are still responsible for paying the taxes on all of your income on time, even if you don’t have all the forms or forgot to include one. You will have to pay interest on the unpaid taxes and may also be fined if you didn’t correct the mistake. It’s better to amend your tax return as soon as you realize you left something out, because waiting will only make the situation worse.

Correcting Dependents, Credits and Deductions

You should also file an amended tax return if your dependents, deductions and credits are not correct, even if it is not in your favor. For example, if you claim your college aged son on your taxes as a dependent, but later find out that he claimed himself as a dependent, either you or your son will have to amend your tax return. The IRS does not allow one person to be claimed as a dependent by two people.

In another example, if you forgot to deduct a charitable donation that you made earlier in the year or found out that you qualified for the earned income tax credit after you filed, you can amend your tax return and claim those deductions and credits.

You can even amend tax deductions from previous years as long as the deduction was applicable in the year that you filed the tax return for. However, don’t go searching through ancient tax returns looking for missed deductions because there is a statute of limitations for filing an amended tax return.

For most deductions and credits, the limit is 3 years after the date the original return was due or 2 years after the date you paid any owed taxes, whichever is later. For example, if you notice a mistake on your 2010 tax return, you would have until April 15, 2013 to make any corrections. There are some exceptions to the 3 year limit, however, so be sure to check. Also, you need to fill out a separate 1040X form for each tax return you are amending and mail them in separate envelopes.

If you realize that you qualify for a larger refund, wait until the IRS has processes your tax return and sent you the refund before amending your tax return. Once you get your refund, you can cash it and then fill out form 1040X to claim your additional refund. If you find that your refund should have been lower or you owe taxes on unreported income, however, amend your return as soon as possible and repay the amount that you owe. You will be charged interest on any unpaid taxes, and waiting will only mean you have to pay more.

The 1040X form is used for many things so you won’t necessarily have to fill out every section. Follow the directions and fill out the areas pertaining to the correction you want to make. Briefly describe the reason you are amending your tax return and attach any necessary forms, schedules and documents to back up your claim. Also, include payment for any taxes you owe. Mail your amended tax return by certified mail with return receipt so that you have proof that the IRS recieved it and when. You will need to mail the 1040X form to a different address than you sent your original tax return, so look in the instructions to find the address for your area.