Tax season is in the past, and for some individuals, that means the potential for filing an amended tax return. Amending taxes can be a confusing process but understanding when and how to file your Form 1040-X is essential for avoiding potential penalties. This blog post will provide information about when you should consider filing a tax amendment, what documents must be included with your form, and how to avoid common mistakes when filing.
What is a Tax Amendment and When Should You File One?
An amended tax return, also known as Form 1040-X, allows taxpayers to correct errors on their original tax filings. Factors that may warrant an amendment are changes to income, deductions, credits, or other items that appear on the original return. You may also need to file an amended tax return in response to a letter or notice received by the IRS. You don’t need to file an amendment for calculation errors within your tax return. The IRS will make those changes automatically. It’s best to file an amended return after the IRS has processed the original filing.
The Required Documents Needed to Amend Your Tax Return
Anytime you amend a tax return, it is important to make sure all required documents are available to use for this process. This includes copies of your original return and any relevant supporting documentation such as W-2s or 1099 forms and any correspondence from the IRS. You should also be prepared to write an explanation of why you are filing an amended return.
What if You Owe Money on Your Amended Tax Return?
If you find you owe money to the IRS after you complete your amendment, you have 21 days to make the payment after filing before possible penalties begin. Penalties can be up to 25% of the amount you owe. Interest will be assessed from the original filing date or filing deadline whichever is earliest. You can make payment by mailing a check with your amendment or you can make an electronic payment on the IRS website here Payments | Internal Revenue Service (irs.gov). As you can tell, it is important to make payment as soon as possible.
What to file?
If your tax preparation software won’t allow e-filing of your amended tax return, here is what you need to include in your amendment packet being mailed to the IRS. Please include your 1040-X form, any changed schedules (i.e. if you added business income, you’d need to include the changed Schedule C) and forms. Any supporting documentation, like a missed 1099-NEC. You do not need to include any worksheets in your filing. Please order the amendment packet like this:
- 1040-X
- Any added or changed income statements like W-2c, 1099-NEC, form 2439 etc.
- Any changed schedules in alpha- numeric order. Schedule 1, 2, 3, A, B, C etc.
- Any changed forms like: Form 1042-S, or Form 8845
- Attach any explanations that are necessary for this filing.
You don’t include the original 1040 filing, or correspondence not specifically requested by the IRS.
Don’t forget to sign your 1040-X and put enough postage on the envelope.
If you need further assistance with amending taxes, it is always wise to consult a tax professional or licensed CPA who understands the complexities of filing taxes. With their expertise, they can help make sure the amended return is accurate and filed correctly.
Source of this article Instructions for Form 1040-X (Rev. January 2023) (irs.gov).
Good luck!
***This article is for informational purposes only and does not constitute tax, legal, or financial advice. Before making any decisions related to taxes, please consult a licensed CPA, Enrolled Agent or other qualified professional.***
