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Step By Step Guide To File An Amended Tax Return: Amending Previous Year’s Taxes

Step By Step Guide To File An Amended Tax Return: Amending Previous Year’s Taxes

Tax filing is a complicated process. It involves a lot of numbers, addition, and subtraction. And since not everyone is an accountant, there is bound to be errors and omissions. When this happened, you might have to file an amended tax return.

Many times, this involves filing an IRS form 1040X and forwarding it to the government alongside necessary supporting documents. We have explained five steps to correct your amended tax returns:

Collate all Relevant Documents 

Get the tax return of the year with the error and any relevant supporting document. In filing the amended tax version, you might have to reference the original tax return. There might also be a need to use any extra documents that relate to your amendments.

For instance, if you didn't file W2 when filing last year, it is important to file and submit it this year. You also need to include all the necessary documents or forms that were missing before.

Collect the Needed Forms 

Since you will be amending new sections, you will need new forms that will take care of the sections. This is better than submitting an overall original tax return. The IRS website will surely have the tax form you want to download, and you can also check previous years' tax forms.

Complete Form 1040X

You also need to download and complete form 1040X from the IRS website. There are instructions for completing the form on the site. You can also discuss why you are filing the amended tax return. There are three columns you will need to fill in the 1040X form:

    •    Column A: Here, you will input your income amount and taxes withheld from the previous year’s tax return. 

    •    Column B: You input the net changes in your income and taxes between the original filing and the amended one

    •    Column C: You input the right salary and tax amount from the amended file

    •    Review Your Amended Return

You need to go through your amended tax return to ensure that all data are accurate, and all details are included. Also, try and include all supporting forms and other documentation before mailing it to the IRS.

Mail the Amended Return 

Once you are confident that everything is in order, you should mail it to the IRS. If you discovered that you owed the IRS when you amended your tax return, make sure you mail the money with the tax return. This will reduce interests and penalties. The IRS needs between eight and twelve weeks to examine and process the amended return.

When Should You File an Amended Tax Return?

Filing an amended tax return is not a must, even if you have an error in any of your tax returns. As long as the mistake is nothing serious, Uncle Sam could be lenient and correct the error. They will, however, inform you of the change.

If the error is, however, significant, which affects your tax obligations, you need to send in an amendment right away. Here are cases that warrant an amended tax return:

    •    The income you reported is wrong

    •    You got more information after you file your tax

    •    The number of dependents you claim is wrong

    •    Your tax included false filing status

    •    You did not claim tax credits and deductions that are relevant to you. 

Filing an Amended Tax Return: How Long do you have?

The IRS gives the grace of three years from the moment of filing the original tax return to make amendments. With this, you have three years to send in Form 1040X to claim your refund. It is, however, recommended that you post in the amendment on time, especially if you owe the IRS. This will guard against the penalty and prevent interest from accruing.

Can You File an Amended Tax Return Electronically?

You cannot file an amended tax return online. It needs to mail traditionally and filed on paper. If you are amending more than a single tax return, print out and prepare a distinct form 1040X for each tax year. 

You should, however, mail each year's return in plain envelopes. Mail them with the corresponding form all in the envelope.

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