Some people file their taxes and call it a day. But if you realize you made an error on your tax return or come across new information that's pertinent to your taxes, you may want to amend the return you've already sent in. Here's what you need to know about filing an amended tax return.
1. You can file online
To file an amended tax return, you'll need to download Form 1040X and follow the directions. Previously, you had to submit an amended tax return by mail, but now, you're able to do it online. You can generally do so using the software you used to file your taxes electronically in the first place. Of course, you also have the option to fill out that form and mail it in, but if you're due a refund, that could result in a delay.
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2. You won't be penalized
You may worry that by acknowledging a mistake on your initial return, the IRS will come after you for tax fraud. Don't spiral. The agency recognizes that the tax code is complex and that errors can be made.
By amending your tax return, you're acknowledging a mistake rather than covering it up, so there's no need to worry about negative repercussions. That said, if your amended return results in you owing more tax, you'll need to make good on that debt.
3. You don't need to amend your tax return to correct math errors
You might assume that if you botched the math on your tax return, you'll need to file an amendment. But that's generally not the case. The IRS will most likely correct math errors on an original return itself and then send you a notice asking you to agree to its changes or dispute them.
4. You don't need to file an amended return if you receive a CP2000 notice
A CP2000 notice is something the IRS sends out proposing an adjustment to your tax return. That adjustment could work in your favor or against you. You don't need to file an amended tax return if you agree with your CP2000 notice. In that case, you'd simply follow its instructions. (For example, if you agree that you owe the IRS some money, you'd sign that form, send out a check, and be done.)
5. You don't need to amend your tax return due to missing documentation
There are certain documents you're supposed to include in your tax return, like your W-2 if you're a salaried employee. If you realize you forgot to include a key form, don't rush to file an amendment. The IRS will generally contact you with instructions on how to submit the information it needs to process your return.
6. You should file an amended return if you forgot to claim an important credit or deduction
Each year, the IRS offers a host of tax credits and deductions that can save you money. If you realize you neglected to claim one of these tax breaks on your return, that's a good reason to file an amendment. While the IRS will correct math errors on your behalf, it won't sign you up for credits or deductions you didn't ask for yourself.
7. There's a time limit for amending a tax return
You generally have to file an amended tax return within three years of the date you filed your return originally, or within two years of when you paid the tax bill associated with that return -- whichever is later. If you wait too long, you might lose the opportunity to amend your return and, as such, give up a higher refund.
We all make mistakes, and thankfully, the IRS gives tax filers an opportunity to correct them. If you botched a recent tax return, the good news is that you can go and amend it. Just be sure to fill out Form 1040X carefully so you get everything right your second time around.
