Amended Return: When and How to Do It

An amended return is redoing your taxes. You may need to amend your return if you realize you’ve made an error or if the IRS audits your tax return but their changes aren’t 100% correct either.

When Do You Need to File an Amended Return?

There are several circumstances when you may need to file an amended return.

  • You noticed a mistake right after you filed. You shouldn’t just send a second return, and if you e-filed, the IRS won’t accept a second return.
  • You forgot to include income or learned that income you didn’t report was taxable.
  • You forgot to include or learned about deductions or credits you didn’t take.
  • You received a notice or letter from the IRS, don’t agree with their calculation of what you owe, but no longer believe your original return is completely accurate.
  • You included income or deductions in the wrong year.
  • You need to add deductions or credits that carry back to previous years or carry forward to future years.

What Happens if You Don’t File an Amended Return?

What happens if you don’t amend your return depends on what you owe.

  • If you would have owed additional tax, the IRS will charge interest and penalties through the date you finally pay the tax. If the IRS believes you were aware you owed additional tax but didn’t amend your return, it may also pursue additional civil or criminal penalties.
  • If you originally overpaid and the amended return would have resulted in a refund, you will lose the right to claim that refund.

How Long Do You Have to File an Amended Return?

In most cases, you have three years from the date you originally filed the tax return you’re amending. If you filed early, you get three years from the actual due date.

If you paid late, you may also be able to amend your return up to two years from your last payment. This applies even if it’s beyond the usual three-year rule.

Does an Amended Return Increase Your Chances of an Audit?

Some tax experts believe amending increases your chances of an audit, but there’s no clear data to support this. The IRS only says that filing an amended return by itself does not trigger an audit.

IRS employees manually review all amended returns rather than computers. However, this is primarily for reasonableness and accuracy. This is not as thorough as an audit, and the people doing the review are not auditors.

The bottom line: If you’ve done your best to complete your return accurately and have the supporting documents you need, don’t leave money on the table by not amending because you’re afraid of an audit.

Does an Amended Return Result in Fees or Penalties?

The IRS does not charge a fee for amended returns.

You may have to pay interest and late payment penalties on any additional tax that you owe if you’re amending and paying after the original return due date. However, this will almost always be less than the interest, failing to pay, and accuracy penalties the IRS will impose if you don’t amend and it discovers you owe additional tax.

How Do You File an Amended Return?

There is a special form for amended tax returns. For personal returns, this is Form 1040X.

The amended return form is similar to the original return form but has three columns: the original amount, the new amount, and the difference. You calculate the new amounts by redoing any forms and schedules that you need to change. Include these with your amended return.

You must file an amended return by mail. Pay any amount you owe online or by mailing a check to the address in the form’s instructions. It usually takes the IRS around 12 weeks to process an amended return. If you’re owed a refund, it may take 4-6 weeks on top of that to receive it.

Because this is a complicated process, there’s less software available to help you, and you may be facing interest or penalties, you may want to have a tax professional help you with your amended return.

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