Amended Returns | Spire Group, PC
By signing your tax return each April, you are making a pledge that it is accurate to the best of your knowledge. But what if in a couple weeks, a couple months, or a couple years you discover that you made a mistake? You may want to consider amending your return.
When should you amend your return?
Interestingly, you are never required to amend your tax return. The IRS provides you with the opportunity to do so, but it is never mandatory. For simple mistakes, it is often easiest to let the IRS correct them for you. If, for example, there is a minor math error on your return, or if you mistyped your W-2 information, the IRS will send you a corrections notice that shows their adjustment. You can simply pay the tax and move on.
For bigger mistakes, it may be in your best interest to amend your return proactively. For example, you may want to amend your return if –
- you receive an updated tax document (such as a corrected Form 1099 from your broker) after you’ve already filed;
- you forgot to include a large deduction that would impact your tax due;
- the tax law has changed;
- you took the wrong credit (or failed to take a credit at all) that was available to you; or,
- you miscalculated your gain or loss on an investment.
It can be tempting to amend a return only if the adjustment will be in your favor, but you may want to rethink this strategy; waiting for the IRS to catch your mistake could cost you dearly. It can often take the IRS months or even years to catch errors, and you will be liable for the interest and penalties that accrue during that time.
If you do choose to amend, you must correct all of your return’s mistakes, not just the ones that will lower your tax bill. An amended return effectively takes the place of your original, and under penalty of perjury, you must state that everything in the corrected version of your return is accurate to your best knowledge.
How do you file an amended return?
To amend your return, you will need to file Form 1040X and attach updated copies of the supporting schedules that have changed. You have until the latest of the following three events to amend your return, after which the statute of limitations will run out: (1) three years after the original due date of the return (typically April 15th), (2) three years after you filed your return, or (3) two years after you paid the tax on your return.
Here are a few more tips to remember about amended returns:
- If you are due a refund, file your amended return only after you’ve received the refund. Feel free to cash the check.
- You cannot e-file an amended return; you must paper-file it.
- You can amend more than one return at a time, but send them in separate envelopes.
- Be patient. The normal processing time for amended returns can take up to 16 weeks.
- Include a copy of your originally-filed return with your amended return.
- You can amend the same return more than once, if necessary, but try to avoid it.
- If the amended return reports a balance due, send payment with the filing.
- You can check the status of your return by calling the IRS at 1-866-464-2050 or by using the online tool called “Where’s my amended return?” on the IRS website.
Any other tips?
If your amended return provides you with a refund, consider also amending your state returns. If you do, it’s likely you can claim an additional refund. States have their own processes to amend returns. For example, New Jersey has different forms for residents and nonresidents. Form NJ-1040X is available for New Jersey residents, and Form NJ-1040NR can be used for nonresidents. Nonresidents will simply have to write the word “Amended” in the upper right-hand corner of their return.
If you are still a bit unsure of how to begin, give us a call. Our Spire professionals understand just what the IRS is looking for and we can help you through the process.