Amend Prior Returns: When and How To File an Amended Return

The need to amend prior returns may arise if a taxpayer reports some items incorrectly on their original return. Whenever this happens, the IRS allows the taxpayer to make changes or adjustments on their already-filed return. This happens by completing a specific form and following a set of instructions. This article takes you through the process of filing an amended return and highlights the amendment process.

When To Amend Prior Returns

The IRS allows taxpayers to amend prior year returns if they made a mistake when filing the returns. You don’t have to file an amended return for errors such as mathematical and clerical errors. Normally, the IRS will correct those without requiring you to fill out certain forms. If necessary, they will send you a refund for an error that is in your favor or a bill for any additional tax due.

You will only need to amend a prior year return if you:

  • Claimed the wrong filing status or there has been a change in your filing status.
  • Forgot to declare a taxable income or tax liability on your return.
  • Forgot to claim tax deductions or credits.
  • Claimed a deduction, credit, or expense that you didn’t qualify to claim.
  • Need to remove or add a dependent.

The situations above usually warrant an amendment of tax returns. But how soon can you amend a return? Generally, you have to file an amended return no later than three years after the filing date of the original return or two years after the date you made the payment on tax.

How To Amend Prior Returns

You can amend prior tax returns by filing the Amended U.S. Individual Income Tax Return or Form 1040-X. This form helps make corrections on a prior return or make changes on amounts previously adjusted by the IRS. What’s more, you can file Form 1040-X to make a claim to the IRS for a carryback due to unused credit or a loss.

The IRS requires that you file a separate Form 1040-X if you’re amending more than one tax year. Forms or schedules affected should also be attached if you are filing a paper Form 1040-X. These could include Form (s) W-2 after the original return.

You will also have to attach Form(s) 1099 and W-2G that support changes made on the original return if income tax was withheld.

Filling Out Form 1040-X

Before filing with the IRS, make sure you indicate the year for which you are amending returns at the top of the form. This form consists of three columns:

  • Column A. This column indicates the original amount reported on your tax return. A copy of your original return should help you fill this column.
  • Column B. This column indicates the net change, or how the items in column A need to increase or decrease.
  • Column C. This column indicates the correct amount. The summation of figures in columns A and B should give you the result to enter in column C.

Before signing the form, you must also fill out Part III, or the “explanation of changes” part. This is where you give your reasons for filing the form or why you want to amend prior returns.

Submitting Your Amended Forms

IRS allows e-filing of amended tax returns from the 2019 tax year onwards. If you wish to amend returns for 2018 or earlier, you will have to submit a print copy of the completed Form 1040-X and any other accompanying forms. You will then mail all the forms and schedules to the address provided by the IRS.

If you wish to amend prior year tax return online, you will need to submit all the necessary forms and schedules, along with the electronic Form 1040 and 1040-SR amended returns. It is advisable to reach out to your preferred tax software provider to guide you through the process of electronic amendment of returns.

In some cases, a tax return amendment could result in a higher tax bill. That means you will have to make an additional payment on tax either by mailing a check with the amended return or making an online payment to the IRS after logging into their system.

Tracking Your Amended Return’s Status

After filing your amended return, you can check its status using the “Where’s My Amended Return” tool. Usually, the IRS takes up to 16 weeks to process your amended return, and it may take up to three weeks from the date of submission for it to show on the IRS system.

Using this online tool or calling the IRS automated toll-free number 866-464-2050 is the fastest and most recommended way to know your amended return’s status.

Superseding Return vs. Amended Return

It is possible to file a tax return and discover a mistake the next day. In cases where the filing deadline, including the extension period, has not passed, you don’t have to file an amended return. Rather, you can file what is referred to as a superseding return.

This is where you amend return before due date by filing a second return. The second return supersedes the first one, and the IRS treats it as the original return. E-filing of a superseding return is not allowed, and amendment must be done on a paper Form 1040.

While it is advisable to file your amended return before it is too late, it’s still not a good idea to file it too quickly. If you are expecting a refund, wait until the IRS issues the refund before amending the return for that tax year.

Also, you can file an amended return for the same tax year as many times as you like. However, you should wait until the IRS processes and accepts the first amended return before sending a second one. This is to ensure that the amendment is properly done.

Bottom Line

Most folks in the working class will have to make a tax return if they earn more than a certain amount every tax year. Mistakes happen when filing a return, and you may need to make changes on a prior return. The IRS allows you to amend prior returns by filing Form 1040-X and attaching the necessary forms and schedules. It is advisable to seek the services of a tax professional if you’re not sure how to amend prior returns.

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