How Far Back Can You Amend Taxes? (A Guide to Amending Your Taxes)

It’s the scenario that everyone dreads: After months of preparation, you’ve finally finished filing your taxes. You made sure every box was checked and every deduction accounted for. You filed state and federal, set up direct routing to your bank account, and announced to your spouse that you’ve finally finished. Months go by, when one day, you make a harrowing discovery. It’s a tax document you forgot about, and it’s important. You panic. Visions of IRS penalties flash in front of your eyes. Is this a criminal offense? You don’t know. What you do know, however, is that you need to do something about it. So, what are you to do? 

The answer is simple: file an amended tax return. Let’s review what exactly is an amended tax return, the time limitations on its filing, and everything else you need to know about amending your taxes. 

What is an Amended Tax Return?

An amended tax return is an official IRS document that is filed to make an update to a prior year’s tax return. Much like an amendment to a law, it’s an official way to make a change to something that’s already in place. Generally, one files an amended tax return when they identify that a mistake has been made on a previous year’s taxes. However, not all errors require an amended return. Let’s review common scenarios and their recommended course of action. 

You discovered a new deduction for which you’re eligible. 

Tax deductions and credits can save you hundreds if not thousands of dollars, and if you’re eligible for them, it’s a mistake not to claim them. Many can even be taken if you opt for the standard deduction rather than to itemize. If you discovered after filing your taxes that you were eligible for a deduction that you did not claim, then by all means, amend! 

You miscalculated your income on your tax return. 

Mistakes and miscalculations happen, and they’re definitely not the end of the world. If you discover that you made a mistake in your math, perhaps in tallying your income or calculating itemized deductions, there’s no need for you to file an amended tax return. The IRS will simply correct the mistake for you and send you a notice to let you know about the correction. Be sure to check their math, as well! If you believe they’ve made an error on their correction, be sure to reach out and let them know. 

You received another income document after completing your tax return. 

The amount of income you make can make a world of difference on your tax return. Not only does it change your tax liability, but even slight variations in your income can push you into another tax bracket, which means you need to be taxed at an entirely different rate. If you discovered or received another income document after filing your taxes, it is imperative that you submit an amended tax return to the IRS as soon as possible. If you don’t, it may appear to the IRS that you’ve attempted to conceal income in an effort to lower your tax liability. 

You didn’t attach a copy of an important document to your return. 

In the case that you forgot to attach a copy of a requested document to your tax return, there’s no need to amend. The IRS will reach out to you and request additional documents if they’re imperative to processing your tax return. 

You didn’t know that your parents claimed you as dependent. 

Were you ahead of the curve and filed early? If you claimed a personal exemption only to discover that your parents claimed you as dependent, it’s important that an amendment gets filed. There are two ways that this situation can be amended. Either you can file an amendment for your taxes that states that someone can claim you as a dependent, or your parents need to file an amendment on their taxes to remove you as their dependent. 

You received a corrected W-2 in the mail after filing.

If your employer sends you a W-2C, otherwise known as a corrected W-2, you’ll need to file an amendment that reflects the corrected information. It may be a pain, but it’s extremely important and keeps you in good standing with the IRS. 

Amended Return Deadline: How Long You Have to Amend a Tax Return

The great thing about amended tax returns is that they can be filed at any time for any year, from the time that your tax return is processed to 30 years from now. If you’re hoping for a refund from your amended return, however, the tax return you’re attempting to amend must have been filed within the last 3 years, or you must have paid the taxes within the last 2 years–whichever is later. 

Taxes can be amended after three years, but you won’t be eligible to receive your updated refund. Similarly, the IRS has a 3-year statute of limitations on tax audits in most cases. At this point, it can be thought of as bookkeeping with the IRS. 

Amended Tax Return and Audit Risk

Some may be wary of submitting an amended return as they’re concerned that admitting you made a mistake to the IRS may trigger an audit. Rest assured that there is no evidence that filing a tax return has any connection to the likelihood of a tax audit. If anything, the IRS may see an amended return as a sign of honesty as a taxpayer. 

How to File an Amended Return

To file your amended return, you’ll need Form 1040X. This form is used to correct any mistakes that you filed on your IRS Form 1040, the U.S. Individual Income Tax Return. Let’s review how to complete IRS Form 1040X. 

First, collect the necessary documents. 

Form 1040X must be filed along with evidentiary documents in order to be processed. Exactly which documents your amendment requires depends on the circumstances of your error. This may be a copy of your corrected or missing W-2, proper documentation of your eligibility for an additional deduction, etc. 

Then, redo the incorrect IRS form. 

For instance, if you incorrectly reported income from your 2017 W-2, you’ll need to complete a new IRS Form 1040 from 2017 with the correct information. You can find past years’ tax documents in a database on the IRS website. Note that you’ll only need to provide updated forms that include the incorrect information; you don’t need to redo your taxes altogether. 

Next, complete Form 1040X. 

Only complete the sections that pertain to your error. In order to do so: 

• Report the incorrect figure in Column A 
• Report the amount of increase or decrease in Column B 
• Report the correct figure in Column C 

If you’re having difficulty completing the form, check the IRS website or consider working with a tax professional for tax preparation services. 

Finally, mail your amended return. 

Once you’ve compiled your evidence and completed all necessary documents, it’s time to mail your amended tax return to the IRS. In the case that your amended tax liability is higher than what you originally paid, include the payment with your return. It can take the IRS up to 16 weeks to process your return, so try to be patient. You can also check your amended return status on the IRS website. 

If you don’t want to go at it alone, Community Tax is here for you. Our tax professionals know exactly what’s needed to get your tax returns correct and up to date, and may even know additional ways to save you money. Contact us today.