You should modify your return if you incorrectly stated certain items in the original return, such as marital status, dependents, total income, deductions or credits. However, you don't need to modify a return because of mathematical errors you've made; the IRS will correct them. After you file your original return, you can determine that you made a mistake or omitted something from your return. While the IRS often finds and corrects errors during processing, there are certain situations where you may need to file an amended return to correct an error or make other changes to your return.
The 1040X reports your original numbers and your new numbers, along with a calculation of the difference between the two. To file an amended return, you'll need the original copy of your return and the new information that needs to be changed. After filing your taxes, you received a W-2 form for a job you only held for a few weeks. The amount shown on the form may be a few hundred dollars, but it could still affect your taxes.
Or, you received an interest statement from a bank account that you had forgotten. The child tax credit is a federal tax credit on disposable income for taxpayers with children under 17 who qualify at the end of the tax year. The IRS reports that you generally must file Form 1040X to modify a return within three years of the date you filed your original tax return, or within two years of the date you paid the tax, whichever is later. Be sure to enter the year of the return you are modifying at the top of Form 1040X.
Some online tax filing services can help you fill out a 1040X form, which you can then print and mail. Each year, individual taxpayers file millions of amended tax returns. The reasons why they modify vary, but the motivation is because they can often put money in their pockets. Here are some of the most common reasons to file an IRS Form 1040X:.
These forms are sent to taxpayers by financial institutions (banks, 26% brokerage firms), investment firms, employers and places where you have been self-employed. The deadline for submitting these documents was February 15. The IRS penalizes issuers if they don't meet this deadline. The issuer may not have complete information in time to meet the deadline.
If so, they can send one and then send a corrected copy when the information is complete. It's not uncommon for issuers to resubmit a corrected form months after submitting the original. While the corrected form may result in only a small change in your tax liability, you must still file an amended return or it won't match the IRS records. Filing an amended return isn't necessarily complicated.
If only one or two calculations need to be changed, it shouldn't be a big deal. The amendment is basically a two-step process: preparing a new return along with any additional attachments that apply and preparing the IRS Form 1040X. The new return will be prepared on the IRS Form 1040, even if you originally filed your return using Forms 1040EZ or 1040A. You'll need to get information from the lines of the 1040 to match the elements of the lines of the Form 1040X.
Include all necessary schedules that are being added or revised so that the IRS has a complete set of information about the changes it is making. You'll need a copy of the original tax return you filed and a new 1040 that you just prepared. Form 1040X summarizes the information from your original return and the revised return. Completing a 1040x is nothing more than transferring information from both returns.
Form 1040X is a generic form and can be used for any tax year. Simply type the tax year you are going to modify at the top of Part B. In part C, you'll summarize the changes that are being made. You can write a separate statement if you need more space than is provided.
It's not uncommon for the IRS to reject an amended return because the explanation was insufficient. Be concise and explain the changes you are making and the documentation you have provided to support the changes. Nobody likes dealing with the IRS and taxes, but you could be leaving money on the table if you avoid a 1040X. If the total amount of taxes you owe is less than your original return, the IRS will refund the difference.
However, filing an amended return is the right thing to do if the correction results in additional taxes due. The IRS will add interest to the amount if you modify the return after the filing deadline. It is rare that they add penalties. Correcting the error in advance will save interest and could avoid penalties.
The most recent data from the IRS on individual tax returns indicates that of the 131 million returns filed, about 5 million were expected to change. This amounts to less than 4 percent, but that projection still affects a significant number of taxpayers. Filing an amended tax return can be a hassle that you'll definitely want to avoid if possible. However, there are some situations in which you'll need to do so, and it's wise to seek the help of a tax advisor who can guide you through the process.
Here are the reasons why you may need to file an amended tax return:. However, you would not normally modify a return if you incorrectly entered the income from Form W-2, since the IRS receives a copy of the W-2 form and will compare it with what you stated and, if an error occurred, it will automatically correct and send you a bill or refund, as the case may be. The IRS website instructs taxpayers not to modify a return in such a situation. If you were owed a Form W-2 or 1099, you may not receive it when you were preparing your taxes for the first time.
. But if you've already filed your tax return and then received additional forms, it's inevitable to modify your tax return. With TurboTax, you can be sure that your taxes have been done correctly, from simple to complex tax returns, no matter what your situation is. Tax return for seniors, Form 1040-EZ, income tax return for individual and joint filers without dependents, Form 1040-NR, U.
For example, if you paid for college tuition during the tax year, you might be eligible for the U.S. opportunity tax credit or the lifelong learning credit. You may also need to modify your state tax return (s), which can be more complex if your residence is or was multi-state. There are many often overlooked tax benefits that a tax professional would know that the average person wouldn't have, such as the possibility that most individuals and small business owners can make pension contributions and share in profits in a new year before the tax filing deadline and still counting for the current tax season.
Asking a tax professional to help you file amended returns can eliminate the headaches involved in the process. In addition, your originally filed tax return must have been filed electronically in order for your amended return to be eligible to be filed electronically. Not all tax software providers support electronic filing of amended returns for a year other than the current one. The statute of limitations for refunds is three years from the due date of the tax return, and if the IRS hasn't made the correction automatically and you have a refund on the way, don't let the statute of limitations expire before filing an amended return.
Be sure to attach a copy of your amended federal return (Form 1040-X) to your amended state return, if required by the state, as is often the case. .