You Can Save Money By Amending Your Federal Tax Return
You may discover you made a mistake on your tax return. No one is perfect (except for us of course). Sometimes it's not a big deal. Other times it can cost you money. You may even make money (if you can call it that) by filing an amended return if you are entitled to a refund. Other times you are absolutely required to amend.
If you're one of those people who isn't always perfect, here are 10 tips on amending your return:
Tip #1: When to Amend
You should amend your tax return if you need to correct your filing status, the number of dependents claimed or your total income. You should also amend your return to claim tax deductions or tax credits that you did not claim when you filed your original return. By amending the return to include these tax deductions or tax credits your tax burden will almost certainly be reduced. These are just a few reasons to amend your return. The instructions for Form 1040X, Amended U.S. Individual Income Tax Return, list more reasons to amend a return.
Tip #2: When NOT to Amend
In some cases, there's no need for you to amend your tax return, even if you think you do. Here's an easy example - the IRS will make corrections, such as math errors, for you. Forget to include a required schedule with your return? Don't worry about it - the IRS will mail you a notice about the missing item.
Tip #3: Form 1040X
Use Form 1040X to amend your return. You can get Form 1040X on IRS.gov/forms at any time. Make note however that you must file it by paper; you cannot file it electronically. Make sure you check the box at the top that shows which year you are amending. Review Form 1040X's three columns. Column A shows numbers from the original return. Column B shows the net increase or decrease for the numbers you are changing. Column C shows the corrected amounts. Explain what you are changing and the reasons why on the back of the form. You don't want to leave anything to chance.
Tip #4: More Than One Tax Year
If you need to file an amended return for more than one year, you must use a separate 1040X for each tax year. Mail them in separate envelopes to the IRS. Send each year to the specific address identified within the instructions for Form 1040X.
Tip #5: Other Forms or Schedules
If your changes have to do with other tax forms or schedules, make sure you attach them to Form 1040X when you file. It will definitely cause a delay if you don't.
Tip #6: Amending to claim an additional refund
Everyone loves an additional refund! I'm sure you're anxiously waiting to get the amended form out if you are entitled to receive more money back from the IRS. Unfortunately, if you are waiting for a refund from your original tax return, don’t file your amended return until after you receive the refund. All amended returns take up to 16 weeks to process. You'll have to wait a bit to receive any additional refund you are owed.
Tip # 7: Amending to pay additional tax
This one is the worst. You have to file an amended return because you owe more tax than you originally indicated. In that case, you should file Form 1040X and pay the tax as soon as possible. This will limit interest and penalty charges.
Tip #8: Reconciling the Premium Tax Credit
You may also want to file an amended return if:
- You incorrectly claimed a premium tax credit, or
- If you received a corrected or voided Form 1095-A (Health Insurance Marketplace Statement).
Tip #9: When to file
Everyone wants a refund. Make sure you don't miss out on yours! You have a limited time to amend your return in order to do so. You can claim a refund by filing Form 1040X within three years from the date you filed your original tax return. You can also file it within two years from the date you paid the tax, if that date is later than the three-year rule.
Tip #10: Track your return
You can track the status of your amended tax return three weeks after you file with the "Where's My Amended Return?" tool available on IRS.gov or by phone at 866-464-2050.