Do over: Keys to fixing a tax return

July 12, 2016 11:34 AM

Time for revisions

Tax professionals are often more comfortable with amending a return than the average taxpayer — but even they can sometimes use a refresher on the subject.

With that in mind, we offer these 10 tips from the IRS on when, why and how to change a previously filed tax return.

This article originally appeared in Accounting Today.

1. Use the right form

That would be the Form 1040X, Amended U.S. Individual Income Tax Return. It must be paper-filed, and the box at the top showing which year is being amended needs to be checked off. The three columns on the front of the form show the original amounts, the net increase or decrease for the amounts being changed, and the corrected amounts — the back is for explaining what's being changed, and why.

2. Know when to amend

Possibly the best reason to amend a return is to claim a deduction or credit that wasn’t claimed on the original return. Among the other common reasons for amending a return are correcting filing status, changing a taxpayer’s number of dependents, or changing their total income.

More reasons are included in the Form 1040X.

3. Know when not to amend

Not everything requires an amended return. The IRS will make some corrections — such as fixing math errors — for the taxpayer. And if a required form or schedule isn’t included, they’ll mail out a notice about the missing item.

4. Each year on its own

If returns from more than one year are being amended, each one should appear on a separate 1040X — and they should be mailed in separate envelopes.

5. More is more

If the changes on the amended return involve other tax forms or schedules, they should be attached to the Form 1040X when it’s filed.

6. Refund first, amend later

If the expected refund from the original return hasn’t arrived yet, don’t file an amended return until after the refund shows up. Amended returns take up to 16 weeks to process, after which the taxpayer will receive any extra refund that’s due.

7. Feel free to pay now

If an amended return will mean the taxpayer will owe more, the IRS recommended paying as soon as possible — and not just because it wants the revenue: It will also help limit interest and penalty charges.

8. Double-checking Obamacare

The IRS suggests considering an amended return for taxpayers who incorrectly claimed an Affordable Care Act Premium Tax Credit, or if they received a corrected or voided Form 1095-A.

9. Filing deadlines

Amended returns can be filed up to three years from the date of the original filing — or up to two years from the date the tax was paid, if that’s later than the original filing date.

10. Follow the return

Most amended returns can be tracked through the "Where’s My Amended Return?” tool; or by phone at (866) 464-2050.