June 6, 2013 | Tax Compliance
Form 1040X: The Amended Tax Return
Having your tax lawyer revising your Form 1040, U.S. Individual Income Tax Return, is done if information reported on the form is incorrect and changes the tax calculation. Filing an amended return is the correct action to take if your original return is incorrect in the amount of income, filing status, number of dependents, deductions, or credits. Taxpayers should also file an amended return to remove deductions and credits they claimed that they might not be entitled to.
Taxpayers have a three year statute of limitations in amending a return that results in additional refunds. This is because there is a three year statute of limitations on issuing refund checks. Taxpayers should not amend their return if they are correcting math errors that were made on the form. The IRS computers will do the math on the returns and can correct such errors.
The IRS can audit amended tax returns, and have a three year period to do so.
Amending a tax return takes two steps:
- First, taxpayers must understand the information that needs to change. The amended return should correct any changes in the filing status, income, deductions or credits from the originally filed return.
- Second, taxpayers, through the help of their tax lawyer, must report the corrected figures on Form 1040X. Form 1040X has three columns. Column A is the figures from the original return. Column C shows the new corrected figures. The differences between Column A and Column C is shown in Column B. When filing out Form 1040X, it is important to explain the changes made to the previously filed tax return. This is done on Form 1040X, Part III, and should provide the clear and concise explanation for the changes made.
Check the amount refunded or the amount owed on the Form 1040X. If the originally filed tax return has a larger refund then the amended return, you will have to pay the difference. If the refund amount from the originally filed tax return is smaller than the amount you receive with the amended return, you will receive an additional refund.
The amended tax return must be mailed to the IRS on paper, and processed manually. This is done so that the IRS can determine if the explanations provided in Part III of Form 1040X are sufficient, and to make sure that there is documentation supporting the amended return present. The processing time for an amended return can vary during its busy season, but typically takes between 8 and 12 weeks to process.