In recent months, the IRS announced that taxpayers would be able to electronically file Forms 1040-X, Amended Form of United States Individual Income Tax Return.
According to the IRS, the provision of the Form 1040-X for electronic filing was "an objective of the IRS for several years."
The current system requires taxpayers to file an amended paper return with the IRS for processing, and the IRS receives more than 3 million of these forms each year. "The new electronic option allows the IRS to receive modified returns more quickly, minimizing the errors normally associated with filling out the form manually," the IRS said in a statement.
What is the 1040-X Form?
The Internal Revenue Service (IRS) issues Form 1040-X to taxpayers who must modify their tax returns for any reason. A Form 1040-X is required for an amended tax return that changes tax calculations, such as changes in marital status, number of dependents, or credit adjustments or income deductions. However, it is important to avoid using Form 1040-X for mathematical errors in the tax return, as the IRS will correct everything in the tax return.
File Form 1040-X
Reviewing your return to correct errors and omissions can be done by completing Form 1040-X, amended return. However, there are certain drawbacks.
Amended tax returns were submitted to the IRS on paper for manual processing. However, with the e-filing, it will now be easier and faster.
Reasons to File a Form 1040-X
File amended tax return Form 1040-X is used to correct any information that changes the tax calculations in the initial tax return. Do not send an amended return only to correct mathematical errors. IRS computers will verify your calculations and correct any calculation errors. Form 1040-X is exclusively used only if incorrect previous return information has been entered, such as post-deposit W-2 or 1099 that arrived after you've filed, or if an incorrect claim.
If you have to delete dependents because you cannot claim them, you must submit an amended return. You must also submit Form 1040-X if you wish to request additional dependents. Talk to family members first to make sure that you have the right to claim them and that no one else has them.
You can change the required tax deductions. You can change the above the line deductions, standard deductions, or the itemized deductions on Form 1040-X.
Is there a statute of limitations?
You have three years to make adjustments that result in tax refunds or additional refunds because the IRS statute limits the issuance of refunds. This three-year period would begin on April 15, if you registered the initial declaration before or before that date. Still, if you requested an extension, the three-year period begins on October 15.
You can receive refunds for overpaid taxes that have been paid in the past two years if you exceed these three years. It is not possible to collect a refundable tax credit that could have missed claiming when you filed the initial return.
Taxpayers who wish to report additional income or overvalued equitable deductions can file an amended income tax return. The IRS has three years to verify the tax return and may take longer if there is a substantial understatement of income.
Preparation of the Form 1040-X
Make sure you have the original tax return and Form 1040-X when you start working on the tax change return. Form 1040-X essentially summarizes the changed information.
Form 1040 changed considerably in 2019 when the 2018 financial year was declared. This new Form replaces the old 1040-A and 1040-EZ declarations available during the 2017 financial year. However, the 1040-X form hasn't changed, at least not significantly. 1040-X issued by the IRS in 2020 includes special instructions if you are modifying a tax return for 2019, such as the lines that you can ignore because personal exemptions are no longer part of the tax code, but also, they suffered no major revision
If the original tax return, being edited, was a 1040-EZ form or a 1040-A form from 2017 or earlier, you may want to prepare a new 1040 form for this year, as you must match line items on Form 1040 on the different lines of Form 1040-X. However, do not file the new revised 1040 with the 1040-X Form.
The most important part of the Form 1040-X is probably Part III, on the second page. Here you can explain the changes you are making to your previously filed tax return. Clear and concise explanations can help the IRS deal more effectively with the modified return. You can prepare a separate instruction if you need additional space.
