What Is an Amended Tax Return, and When Is It Worth It?

Updated 05/07/19

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what is an amended tax return
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Oh, the joy of tax season: This year I forced myself to get my 2017 taxes in early, which I’m quite proud of, considering I have a more complicated return than most (freelancing will do that to you). While doing some research before filing, I came across a question I wanted to learn the answer to the question “What is an amended tax return?” Yes, we make errors on a lot of things, but I never actually thought we could make changes to our tax claims after the fact—but, oh was I wrong.

An amended tax return can be made using IRS Form 1040X after you’ve already filed your return. One thing to note—it cannot be submitted electronically, so you’ll have to send it by mail. Other things to include in the envelope? A check or money order if you owe the IRS, and a copy of the return you need to amend. But let’s be honest: The amended tax return process is a little more intricate than just these steps. Read on to get the full lowdown, including when (or whether) an amended tax return may apply to you.

What is an amended tax return?

An amended tax return is a return one files to make corrections to previous tax errors, and it’s often done to seek a better filing. The rule of thumb is that you’re not required by law to make an amended return even if you receive forms like a 1099 or Form K-1 after filing as long as it was a simple error made on your end. When we sign our income tax return, we state that it’s correct to the best of our knowledge, and the penalty is perjury. “When considering an amendment, first ask yourself whether the return you filed was accurate to your best knowledge when you filed it,” says tax lawyer Robert W. Wood.

“If it was, you’re probably safe in not filing an amendment.” And even if you still want to amend it, that would be your choice.

When do I need to submit an amended return?

Failing to claim a dependent or accidentally claiming one would be one important situation in which you’d need to file an amended return. Another case would be that you accidentally underpaid your return (uh-oh), and by sending payment along with the amended return, you can usually avoid paying a penalty. If your income is wrong for the year and you accidentally made more (or less) than you initially reported, you would also have to divulge that. Last scenario? You missed out on some deductions that would have been advantageous to your return.

What do I need to fill out?

The form itself is less complicated than you would imagine, and the main section has three components. Column A is for your original return numbers, Column B includes any additions or subtractions, and Column C is the revised amount. On the back, you’ll need to write a brief summary as to the reason you’re amending your return. And as we mentioned before, you’ll also have to submit any paperwork relevant to the revisions including a W-2, or a new Schedule A if it deals with your itemized deductions.

Of note: You can’t just include adjustments that are beneficial to you—all revisions must be made at this time. “You can’t cherry-pick and make only those corrections that get you money back, but not those that increase your tax liability,” says Wood.

What do I need to know about timing?

As a rule of thumb, tax return amendments can be made within three years of filing or two years after paying taxes (work off whichever happened last). And if you’re doing more than one year’s worth of amendments at once, you’ll need one form for each year. If you anticipate that you’ll have a tax refund, know that it may take up to three weeks to get to the IRS, and it can take about 16 weeks after to be processed. If you need to check on the status of your amended return, the IRS has a service for that here.

What else do I need to know?

If you need to amend a federal tax return and you pay state taxes, it’s likely you’ll need to amend both. This is because your state return uses numbers from your federal return; therefore, both would be affected. Be sure to ask a financial advisor if you have any questions about this. If your Social Security number on the return is wrong, you should always amend it (even if it initially went through). Finally, if the IRS makes changes on your return that you agree to, there’s no reason for you to submit Form 1040X.

Now that you know all about amended tax returns, you should feel better knowing that you can always make a change. And guess what? It may just be the very boost you need to try to do your own return this year. 

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