It’s my annual “Taxes from A to Z” series! Next up:
Mistakes happen. And sometimes, no matter how careful you are, those mistakes happen on a federal income tax return. Those mistakes – no matter how innocent or unintentional – can affect your federal income tax liability. While it’s tempting to fret over it, there’s no need for drama. And definitely no need to call the Internal Revenue Service to talk about it (especially this season!). You can easily address most mistakes with the use of a federal form 1040X, Amended U.S. Individual Income Tax Return (downloads as a pdf).
The form 1040X is much less complicated than the form 1040: it’s a mere two pages long. That’s because it’s not meant to be a new return, just an improved one. In other words, the IRS wants you to use the form 1040X just to correct your errors, nothing more.
It’s important to understand that this is the ONLY form you’ll use to correct your mistakes. Do not file another original tax return instead of a form 1040X since that will just confuse the IRS and will delay processing of your return and your refund if you’re entitled to one.
Additionally, do not use form 1040X to file for an injured spouse claim. That’s a federal form 8379, Injured Spouse Allocation (downloads as pdf).
Now that you have all of that straight, here’s what to expect:
The front page of the form 1040X is an abbreviated version of your form 1040. In Column A, you’ll briefly summarize the items on your tax return as originally reported. In Column B, you’ll indicate any adjustments, either up or down for your items of income, deductions, liabilities and payments. In Column C, you’ll report the correct amounts as they should have appeared on the original tax return. So clearly A +/- B should equal C. Simple, right?
On page two of the form, you can make adjustments to your personal exemptions (if necessary) and elect to contribute to the Presidential Election Fund (though oddly enough, not to revoke a prior choice to contribute).
On page two, you’ll also explain the reason for your amended return. This is important, so don’t skip over this section (you’ll find it on the form at Part III). You don’t need to write a treatise about why you’re making the correction but you do need to be clear. Examples might include “received corrected form W-2” or “transposed Social Security number.” So long as you’re making a timely amendment, there’s no need to explain how you meant to include the information below but got distracted by the kids or how your dog ate your form W-2. The exception to this rule is, of course, if you have information that would be relevant to the calculation of any penalties and interest.
Attach a new or corrected return, clearly labeled “Amended” to to the back of federal form 1040X and pop it in the post. Read the instructions carefully, however, since the place of filing depends on where you live and the type of original return (EZs and NRs, for example, have a different address).
If you owe additional tax as a result of the amendment, include payment with your return. If you can’t pay the entire amount, you can enter into an installment agreement. If you are to due a refund, you can opt to apply it to next year’s tax return or have a refund check mailed to you.
Once you’ve filed your return, you can track the progress online using the “Where’s My Amended Return?” tool. You can also call 1-866-464-2050. You’ll need to provide your Tax ID number, your date of birth, and your ZIP code. And be patient: a federal form 1040X usually takes an additional 8 to 12 weeks to process.
