Amend Taxes: Guide on Filing & Amending Federal Tax Returns

amend tax returnIt is important for each taxpayer to understand how and when to file an amended tax return. Despite your best efforts when preparing your tax return, at some point in your life you will undoubtedly come across a time when you must amend your tax return. This happens once your tax return has already been mailed or filed electronically and you discover changes that have to be made. The following information can help you determine when you need to file a an amended return and how to go about the process.

Reasons to Amend a Tax Return

Once you notice errors on your tax return, do not immediately assume you have to file an amended return. If the errors are mathematical in nature, you probably do not have to file an amended return. This means if you entered the correct figures but made a mistake in adding or subtracting, the IRS computers will spot your error and make the corrections automatically. Changes to your tax return for the following reasons will require you to file an amended return:

  • Additional withholding- 1099 or W2
  • Additional income- 1099, W2 or other statements reporting income
  • Adding or removing dependents
  • Changing personal exemptions
  • Changes to tax credits- this included adding, removing or recalculating credits
  • Reporting the correct filing status
  • Changes to standard, itemized or above-the-line deductions

Basically to avoid problems with the IRS, you should file an amended return whenever there has been a mistake in the reporting of your filing status, income, credits or deductions.

How to File an Amended Tax Return

If you have determined that you must file an amended return, you must do so manually using Form 1040X. Form 1040X is the Amended U.S. Individual Tax Return and can be used to correct the following previously filed Forms; 1040, 1040A, 1040EZ, 1040NR and 1040NR-EZ. In order to file your amended return you will need your original tax return to reference when filing out the Form 1040X. You do not want to make mistakes the second time around, therefore it is important you have all the correct data in front of you to ensure the amended form is without error. It is important to note that Form 1040X has been redesigned for the tax year 2009. Prior to the redesign the Form 1040X had three columns which showed the data reported on the original tax return, the changes made and the adjusted value. The new design eliminates two of these columns which means only the adjusted (correct) value needs to be entered. There is also a space provided on the form to explain why you are filing an amended return. In addition to sending the completed Form 1040X, you must also submit copies of any forms or schedules that have changed as a result of the amendment. Any additional documentation that was received after filing your original tax return (W2, 1099, etc) should also be submitted along with the rest of the required documentation.

When a person files an amended return, it may result in a change to the amount of refund received or tax liability owed. For this reason it may be in your best interest to consult with a tax professional for advice on how to handle changes that may result from the amended return.