How to Amend Your Taxes

May 11, 2012 by  Filed under: Taxes 

Filing your taxes can be one of the most complicated things you do all year. All those forms and numbers and receipts and tax code changes can be enough to make the heads of tax professionals spin.

It’s no surprise that taxpayers often forget to include something essential in their return or fill it out incorrectly. If this happens to you, you’ll have to file an amended tax return.

Amending your tax return involves preparing and filing IRS Form 1040X [Amended U.S. Individual Income Tax Return]. Once filed, Form 1040X will become your new tax return, changing the information submitted in the original.

The reasons to file an amended return include

  • Incorrect personal information – Mistakes in your name, social security number, dependents, and filing status may require an amended return to correct. The latter two are particularly important, as they can have a huge impact on your refund or tax due.
  • Receiving a new tax form – If a new W-2 or 1099 that you forgot about arrives in the mail after you’ve already filed, you’ll have to amend your return to report this income. Employers send a copy of these forms to the IRS, which will hold you accountable for back taxes and all the penalties and interest that go along with them.
  • Missing a credit or deduction – Some credits and deductions can have a huge impact on your tax return’s bottom line. If you forgot to claim something that can significantly reduce your tax due or increase your refund you should amend your return.

There are a couple things you should know before you file an amended return. First off, you can only amend a return once the IRS has accepted the original. For paper filers, this happens as soon as the IRS receives the mailed copy of your return. But e-filers must wait for notice of acceptance from the IRS. If your return is ultimately rejected, you won’t have to amend it at all.

Also, you have a limited amount of time to amend a return. You’ll have to do so within 3 years of filing the original or within 2 years of paying the tax due, whichever is later.

As with most late tax issues, you cannot e-file an amended return. You’ll have to snail mail it to the IRS the old-fashioned way.

Don’t forget to amend your state return as well. Not only are state and federal returns often interconnected, but you want to avoid getting in trouble with your state tax authority.

Unless it was their fault that your original return is incorrect, the best place to file an amended return is with the same tax preparer that helped you file your original because they already have all of your information. For a small fee most will help you prepare Form 1040X will relatively little hassle.

LateTax is a convenient online service that helps you prepare your late tax returns and resolve your back tax issues with the IRS. Save yourself stress and time with a program much easier to use than big-box tax preparation services.

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