Marketing disclosure: I may receive a fee if you use products and services linked on this page.

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.

What is an amended return?

An amended return is essentially resubmitting your entire tax return. It’s different from other types of changes where the IRS may send you a notice or letter requesting additional information about a single item on your tax return.

An amended return is also generally voluntary. Instead of the IRS asking you to file a corrected Form 1040, you would generally do so after realizing you made a mistake on your original return.

When do you need to file an amended return?

You file an amended return if you made an error or need to make changes to a Form 1040, Form 1040-SR, or Form 1040-NR that you already filed. The formal name for an amended return is Form 1040-X Amended US Individual Income Tax 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 learned a filed form you received from a third party was incorrect.
  • You forgot to include income or learned that income you didn’t report was taxable.
  • You forgot to include or learned about deductions or tax credits you didn’t take.
  • You received a notice or letter from the IRS informing you have a tax liability, disagree 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 prior 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.

Should I amend my return for a small amount?

If you believe the IRS owes you money, it’s generally up to you to decide how much you’re willing to let the IRS keep to avoid amending.

If you believe you owe more, keep in mind that the IRS may figure it out eventually. You may owe years worth of interest and penalties when the IRS finally audits your return.

How long do you have to file an amended return?

In most cases, you have three years from the date you filed your original return. 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 the date you paid. This applies even if it’s beyond the usual three-year rule.
  • If you need to go back and write off a worthless security or business bad debt, you get up to seven years.
  • If you have a net operating loss or a tax credit from a net operating loss carryback, you can amend affected prior years up to three years after the due date for the year of the loss.

How quickly can you file an amended return?

If you make a mistake on your taxes and notice right after you file, you generally need to wait until the IRS accepts your tax return. While your amended return will usually get to them slower than your original return, it may cause problems if they try to process it before your original return.

You should not try to file a new tax return. If you file electronically, the IRS computer will automatically reject it. If you file by mail, the IRS will still generally reject a second tax return.

How many times can you file an amended return?

In theory, you can amend your return as many times as you need to. Practically, the IRS might start asking more questions if you amend multiple times. If you file electronically, the system will reject your return after the third time. If you really need to amend your return for a fourth time, you will need to mail it in.

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 original tax return accurately and have the supporting documents you need, don’t leave money on the table by not amending it because you’re afraid of an audit. If the IRS does ask for additional information, you can just explain why you’re right.

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?

In order to file an amended return, you need to file Form 1040-X Amended US Individual Tax Return. Form 1040-X is similar to Forms 1040 and 1040-SR. The difference is that Form 1040-X has spaces to show your original numbers and your new numbers.

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 can electronically file an amended tax return for a 2019, 2020, or 2021 Form 1040 or 1040-SR. All other amended returns must be filed by mail and cannot be electronically filed. Pay any amount you owe online or by mailing a check to the address in the form’s instructions.

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.

Do you have to submit a new Form 8879 when you file?

Form 8879 is the form that says you’re electronically filing your tax return under penalties of perjury. Any time you file an original or amended return, you must submit this form. The changes are also under penalties of perjury, so you need to submit this form each time you file an amendment.

If you’re claiming an additional refund, can you receive a direct deposit?

You can’t receive a direct deposit when you amend your tax return. The IRS will mail you a check.

Can tax preparation software help you file an amended tax return?

TaxAct is one of the few online tax solutions that allows you to create an amended return. You can generate a Form 1040-X by editing your original return and then selecting the amended return option at the end. If you used other tax software, you can enter your original return then enter the changes to create a 1040-X.

Most other tax software either doesn’t handle amended returns or charges a much higher fee than originally filing your return. If you still have access to your original software, another option is to redo your tax return using that software. You can’t file what the tax software gives you since it’s a Form 1040, but you can compare the new 1040 to your original tax return and use it to fill out Form 1040X by hand.

How do you track the status of an amended return?

Use the IRS Where’s My Amended Return online tool to check the status of your amended return. Since this is a mailed form, it takes at least three weeks for it to show up in the tracking system. The IRS takes up to 16 weeks to process amended returns. It may take another 4-6 weeks after processing to receive your refund if you’re owed one. Call the IRS for an update if it’s been longer than any of these timelines.

You can review the IRS instructions for Form 1040X here. As always, make sure you include your correct tax identification number so the IRS knows who you are.

COVID-19 may delay updates and processing of your amended return. The IRS has been months behind on mailed returns due to related delays. If your amended return isn’t showing up in the tracking tool, it may be sitting in a truck or warehouse waiting for IRS employees to catch up on their backlog. Use certified or priority mail if you want to know whether your amended return was delivered.

What do the amended return status messages mean?

  • Received means the IRS has your electronically filed or mailed return in its possession. They haven’t processed it yet. Processing can take up to 16 weeks.
  • Adjusted means that the IRS has made an adjustment to your account. This could mean you’ll get a refund, have a balance due, or have no change in your tax liability.
  • Completed means the IRS has finished all aspects of processing your amended return. They won’t make any further changes to it or your account balance. There is still the usual risk that you could get audited later.

IRS status messages update overnight, so there’s no point to checking more than once per day.

What do I do if it’s been longer than 16 weeks?

The IRS may take longer to process your return for reasons related to your return or simply because they’re behind. They will contact you by mail if they need additional information. If you want to make sure you didn’t miss a letter, you can call the IRS for more information.

Conclusion

Filing an amended tax return may seem difficult, but it’s similar to filing your original tax return. Getting these corrections in can help you reduce any interest and penalties you might owe the IRS because of a filing error.

Leave a Reply

Your email address will not be published.