Even the most careful of taxpayers may later discover a mistake on an already-filed return. If you discover an error on your personal income tax return Form 1040, 1040A or 1040EZ, the next step depends on what kind of mistake was made. In many cases, you will need to complete IRS Form 1040X also known as an amended tax return, which we will cover in this guide. At Community Tax, we help you with the IRS, including tax preparation and filing tax returns.
What Is a 1040X Amended Tax Return?
The IRS itself may correct simple math errors on a filed return, and will send a letter to notify you of the changes they make. If you forgot to attach a form or schedule to your original return, the IRS may either accept the return as-is, or may send you a letter requesting the missing document. In these situations, keep an eye out for a letter from the IRS telling you what, if anything, you need to do to correct the issue.
If the mistake is more complicated than math errors or missing forms, however, you may need to take the initiative and amend the return by filing IRS Form 1040X form. The 1040X form is designed for taxpayers who need to correct a return that was filed with the wrong:
- Income figure
- Filing status
Tax Form 1040X contains a detailed list of each adjustment, so you can record the type and amount of every amendment. You’re also able to report describing why you’re making this amendment.
What Is the Tax Form 1040X Used for?
You can amend your tax return for any reason. You have the option to correct your information whether you:
- Discovered a mistake on a return
- Overlooked deductions or credits
- Reported incorrect income
Doing so reduces the risk of penalties and accrued interest, and can maximize any refunds. You don’t need to amend your tax return if you made simple mathematical errors, as the IRS automatically accounts for these mistakes.
What Information Do I Need to Amend My Return?
In order to amend your return, you need to have a copy of the original tax return you’re correcting and any supporting documents that relate to your amendment. This enables you to transfer any information onto Form 1040X, including your income and filing status. Provide proof for any change you’re making to justify any deductions.
When filling out Form 1040X, you will need to list the:
- Figures reported on the original return in Column A
- Amount of increase or decrease in Column B
- Correct figure in Column C.
Depending on what error or errors you are correcting, you may not need to fill out all sections of the form. If you aren’t sure which sections apply to you, consult the, available on the IRS website, or contact a tax professional for assistance. Whichever other sections of Form 1040X you are required to complete, be sure to fill out Part III, Explanation of Changes, to tell the IRS why you are amending your original return.
If you need to correct errors on more than one year, make sure you file a separate form 1040X for every year, and mail them in separate envelopes. At the top of each Form 1040X, check the appropriate box to indicate which year’s return you are amending.
How Long Do I Have to Correct My Return?
If at any point you discover a mistake on a past return you can amend it at any time, but this doesn’t apply if you‘re filing with the intent of increasing a tax refund. There is a three-year statute of limitations on amending a return for tax refunds. Have a tax expert from Community Tax examine past refunds to correct any mistakes and take advantage of overlooked credits and deductions.
Once you send the form to the IRS, it can take up to 16 weeks to process. If you expect to receive a refund, wait at least this amount of time before contacting the IRS about a missing refund.
You can check the status of your amended tax return by using the “Where’s My Amended Return” function on the IRS website. You can also call 1 (866) 464-2050.
How Do I Know If I Need to Correct My Return?
The IRS should send you a notice, such as Notice CP2501, in the mail if they spot a discrepancy in your tax return, and they’ll send you a bill if you owe money. If you receive a bill from the IRS, don’t worry, but take action as soon as possible.
How Do I Go About Sending in a Requested Amended Tax Return?
To initiate the process of sending in corrections for your tax return, follow these steps:
- Compare the bill to your records to determine if there is a mistake.
- Should there be an error in the bill, send a written explanation to the contact information listed on the notice.
- If necessary, complete the 1040X form. It is important to note that Form 1040X cannot be e-filed.
- Provide any appropriate documents to support your claim, like past tax returns and receipts. If you owe the IRS money, pay your debt as soon as possible. You can include a check, but do not staple it to the form.
- If you don’t have the money upfront or you think there’s a mistake, contact the tax professionals at Community Tax, and an expert will strategize a plan to keep you in good standing with the IRS.
If you’re still unsure of how to amend your tax return or if you need to do so, reach out to one of our knowledgeable tax professionals.
What Happens If I Don’t Correct My Return?
Unnoticed mistakes on a tax return can be costly. You may be subject to accrued interest and penalties when you fail to report appropriate information regarding:
In addition to failing to make these corrections, you may also face penalties for:
- Making a late payment.
- Filing for a refund or credit that is more than what you are owed.
- Filing a frivolous return.
What If I Can’t Pay the Amount in Full?
When you correct your tax return, you might discover that you owe money to the IRS. The good news? Once you find out you owe, you can halt accruing interest and penalties if you pay right away. If you don’t have the cash upfront to pay in full, the IRS has payment plans available to help you pay your debt in due time.
The IRS enacted this payment plan in order to allow a broader range of taxpayers to pay their taxes over time. If you qualify, you’ll be able to pay a fixed amount every month over a period of time until the debt is paid in full. Keep in mind that you’ll still accrue interest over time until the debt is paid.
Offer in Compromise
You can appeal to the IRS if you think you’ll face undue financial hardship if you pay the full amount you owe. This agreement permits you to pay a lesser amount than what you owe, so you can still pay for your basic needs.
Not Currently Collectible Status
In some cases, the IRS will cease trying to collect your debt if they decide you can’t pay without meeting your needs. The IRS won’t garnish your wages or levy your bank accounts, but you’ll still accumulate interest and penalties over time.
First Time Penalty Abatement
If you forgot to file a tax return on time or you didn’t pay your taxes on time, and this is your first offense, you can opt for a first time penalty abatement. In order to qualify, you must’ve had no prior penalties in the past three years.
Stair Step Agreement
The stair step agreement allows you to pay back other major debts and expenses before you pay back taxes. Circumstances in which you pay child support or have a substantial loan qualify you for a stair step agreement.
If you can’t pay your tax debt in full, reach out to our professionals at Community Tax today and they’ll devise a solution to help you move forward.
Should I Hire a Tax Professional?
You can prevent mistakes when you prepare your taxes with Community Tax. When you suspect a mistake in your taxes or you’re contacted by the IRS, hire a tax professional to resolve your tax issue. Whether you need to file Form 1040X or you need help lifting a levy off your bank account, our experts are here to help you through it. We take a personal approach by assessing our client’s needs and working with them every step of the way.
Choose Community Tax when you need to amend your taxes. We’ve helped over 44,000 people with our services, and we’re ready to work with you now. Call us today at 999.676.4319 for a free consultation.