Finding an error on your tax return is a heart-stopping experience. Will the IRS come after you for filing an inaccurate return even if the mistake was purely an accident? Could you be arrested for a simple misstep? Is there any way to fix it before you get in trouble?
First things first, relax. There is no need to panic. IRS Form 1040X is here to help you make everything right, and the 1040X instructions are incredibly easy to navigate.
Second, rest assured that you are not the one and only person to make a mistake. Tax documents are complex, and people have to amend their returns to make corrections regularly. In fact, about 4 percent of the returns each year are amendments, totaling around 5.9 million amended returns.
Filing an amendment is a pretty straightforward process. To help you get started, here are some Form 1040X instructions.
Understanding the IRS 1040X Form
Called the “Amended U.S. Individual Income Tax Return,” the 1040X allows you to correct issues on your previous filings. The document is two pages and gives you the ability to fix common individual tax returns, such as the 1040, 1040A, and 1040EZ.
The results of amending a return can vary. In some cases, you may get more money in the form or a refund. However, you could also owe money, depending on whether your original refund was too large or your tax liability increased.
How to Prepare to Fill Out the Forms
First, download the form. Since a 1040X is an amendment to a previous return, you want to have the original return available. This allows you to recall what was on these core documents, making it easier to complete the new forms.
Additionally, having supplemental documents is helpful. This can include your original W-2s, 1099s, paystubs, or anything else that contains accurate information.
If you are filing a 1040X because you took a standard deduction and now want to itemize, then collect documentation that makes listing your deductions easier. For example, you may need receipts to support your claim. Also, you’ll want a copy of Schedule A, as this will need to be sent with your amended tax return.
Make sure you have access to a printer, scanner, envelope, and postage as well. The Form 1040X can’t be e-filed; it has to be sent through the mail. Plus, you have to send copies of various documents, such as the original return, W-2s and 1099s, so being able to scan them and print more is helpful.
Here are the detailed instructions.
IRS 1040X Instructions: Dealing with the Header Section
The header section of the 1040X is similar to the original 1040. However, you need to check a box to indicate the tax year you are currently amending. If you need to correct multiple years, you’ll need a 1040X for each return.
Everything else should be pretty familiar. List your name, Social Security Number, and spouse’s information (if filing jointly). Then, provide your current physical and mailing address as well as your phone number.
Next, select your filing status and answer the question about health coverage.
Form 1040X Instructions: Where the Changes Happen
Barring the header question about your filing status, section two of the 1040X is where most of the changes happen. The left column provides a brief description and some instructions, all of them falling under general headings, like Income and
Deductions, Tax Liability, Payments, and Refund or Amount You Owe
The three right-hand columns help you track the adjustments. In column A, you’ll record information from your original filing.
Column B is for the net change, and Column C shows the correct amount.
Begin by writing all of your data in Column A. Then, record the increase or decrease in Column B. Combine Columns A and B to get the number of Column C. If nothing is in Column B for a line, then the number from Column A goes in Column C.
If you need to enter a negative number in any column, don’t use a minus sign. Instead, wrap the number in parentheses. As an example, -125 would be (125).
Proceeding Through the IRS Form 1040X
While it may be tempting to focus only on the areas where you know there are changes, proceeding through IRS Form 1040X line by line is a smarter choice. Read each line carefully and then review your documents to make sure you aren’t overlooking something that needs an update.
This is especially true if a math error happened on your first tax return, as your copy of your filing may include an error. Typically, the IRS spots mathematical errors and makes these corrections for you. However, if you are referring to your original 1040, 1040A, or 1040EZ, that doesn’t show the correct number.
In those cases, you’ll need to refer to your math error notice or any other documentation from the IRS that includes updates on your original figures. The IRS provides thorough information to the taxpayer when they adjust a return because of a math mistake, so you should have everything you need to proceed in those letters.
Luckily, since the IRS is adept at spotting math mistakes, this means you don’t need to review your calculations when completing Column A. If you didn’t get an official notice saying there was a calculation error, that data is safe to use.
However, you do want to take care when doing the math on your 1040X, especially if you are completing the calculations by hand. Otherwise, you could end up with a mistake while you are trying to amend a misstep, and that isn’t ideal.
Finding Figures Set By the IRS
In some cases, the figures you need to list in Columns A or C are set by the IRS. One example is in the Tax Liability section. On Line 6, you need to list the amount set by the IRS. Refer to the Tax Table for the year you are amending to get an accurate figure.
This step is incredibly important if your taxable income (Line 5 in the Income and Deductions section) changed, even in the slightest. That way, you have an accurate figure to work with moving forward.
The same goes for any tax credits listed in the Payments section of the document. If you are amending your return, you need to determine whether you are eligible for each of the credits and that the amounts are accurate. If your income shifted, then it’s always wise to check the Earned Income Tax Credit at a minimum.
The IRS has strict guidelines regarding who qualifies for a credit and the amount you can receive. You need to refer to information from the tax year you are amending, as certain requirements and amounts may have changed in subsequent years, which can make the current amounts incorrect in relation to this 1040X.
At Line 16 in the Payments section, you’ll notice that you will only need to deal with a single column. Going forward, you are effectively calculating whether you will owe more in taxes or get an additional refund.
Explaining the Changes to the IRS
After you complete the initial sections, you will have to take a moment and explain what happened to the IRS. Every change needs a quick summary.
You can begin with a statement that explains why you are amending your return, such as “Amending to add income from W-2 that was not originally reported,” if you are submitting changes according to a newly found W-2.
Next, for every line where Column A and Column C differ, make a small note. For example, “Lines 1,3,5: Gross income adjusted, taxable income increased/decreased by $XXXX.”
Each description can be incredibly brief; it just highlights what you are amending and why.
Sign, Date, Gather, and Mail
Once the document is complete, you need to sign and date your 1040X. Plus, you need to gather copies of the amended 1040, documentation regarding what triggered the amendment, and any new schedules you need to include.
After getting it pulled together, place it in an envelope and refer to the 1040X instructions on page 14 that covers “Where to File.” Find your state and send it to the address on the list.
1040X Filing Deadlines
Taxpayers get approximately three years to file an amendment on a particular return. If you file your tax return before the April cutoff, such as by submitting in February or March, you actually get three years after the April deadline to file. If you file right on time, then you get almost exactly three years. Individuals who filed extensions get three years from the date of filing.
However, some people may be eligible for more time. For instance, those with physical or mental disabilities might get a larger window to submit a 1040X, though formal arrangements with the IRS could be necessary.
A Final Word on the 1040X
Ultimately, there are numerous reasons why a person may need to file a 1040X, and millions of amended returns are sent each year. If you made a mistake, just use the form and fix it. But make sure to take your time and double check your math, ensuring everything is right this time around.