Spring is normally a time of excitement. It is the signal that summer is about to arrive and with it comes warm weather, vacations and time to enjoy the great outdoors. But before that can happen, you must face the dreaded tax day.
Many Americans are studious and begin to prepare for this event long before taxes are actually due while others wait until the last minute and hope to barrel through the uncomfortable process in only a day or two and lessen the pain.
But regardless of the method that you use, taxes must be filed by the set date. And as with any task completed by a human, there is always the chance of an error or mistake in the process.
If you find that you have made a mistake on your forms, omitted some information or entered incorrect information then you are going to need amended tax return instructions.
How It Works
If you have made a mistake on your taxes, don’t worry that you have to start over and complete an entirely new set of forms. The mistake is normally going to be that you forgot to include some income or that you missed a deduction or credit that you should have taken. In the first case, you are likely to owe additional taxes and in the second case you are probably looking at a bigger tax return or at least a reduction in the amount of tax that you owe. Either way, you need to correct the issue and can do it by filing a 1040X form as long as you originally filed using a 1040, 1040A, 1040EZ, 1040EZ-T, 1040NR or 1040NR-EZ. Much of the information that you will need for the 1040X can be found on your original tax form but you will need to correct the mistake when updating the 1040X form.
If you used a tax preparation software, then you should be able to use the same software to complete the 1040X form and print it. This is a good reason to use tax software, not that you ever plan on having to file an amendment, but if you do the software will take you through the process and assure that you don’t make any additional mistakes. It is a simple way to complete a form that you hopefully will never need to complete again. The only real downside to using the 1040X is that it cannot be e-filed so you will need to print it and mail it to the IRS.
How Long You Have to Amend
Everything having to do with taxes has a time frame that you must work within and the amendment process is no different. You have three years to amend a tax return or two years from the date that you paid any tax that you owed. It normally takes several months to see the end result of your amended filing but you can check the IRS website three weeks after you submit the 1040X to learn the status of your filing.
Other Things to Know
One question that many taxpayers want to know is can they change their filing status from married filing jointly to married filing separately when filing an amendment. This is a question that might arise for financial reasons but it is not permitted. You can’t change that part of your filed return. Another bit of information that is helpful in understanding the fee structure. Filing late is an option but not one that is free. The late filing penalty, which applies if you are amending your tax return, is 5% of the additional taxes owed for each month that the payment is late.
The maximum penalty is 25%. If you are filing more than 60 days past the due date then the minimum penalty is $205 or 100% of the unpaid tax. So if you owed an extra $100 and filed 3 months late then you owe the additional $100 plus a penalty of $100 for a total of $200. The moral of this is to file an amendment as soon as you discover that you made a mistake. Your mistake will not go away but the longer that you wait to correct it the more it will cost you.
Reasons to Amend or Not to Amend
If you discover an error in filing status, dependents, total income, deductions or credits then you will need to file an amendment. These are all areas that will have an impact on the total tax that you owe or the total amount of the refund that is due to you. If you are reviewing your tax documents and find that you have made an error in your math calculations you do not need to compete a 1040X amendment form. The IRS will automatically correct any math errors in your tax return. If you find that you forgot to include a necessary form such as a schedule or W2 you also don’t need to file an amendment. The IRS will send you a request if there are any necessary forms missing.
All of these simple errors are just another good reason to spend a little bit of money to purchase tax preparation software or to have your taxes completed by a professional preparer. The few dollars that you spend can save you a lot of stress when you realize that you made a simple error and now need to amend your taxes. Finally, remember that changes to your federal income tax will also change your state income tax in many cases. You will want to review your state tax return to see if you also need to amend that filing as well. Millions of Americans have made mistakes on their taxes and had to file an amendment. Reading the amended tax return instructions will make the process much less intimidating and frustrating. But don’t put off completing the form and correcting the issue. The longer you wait the more expensive it could be to correct the issue.