The IRS announced that you can now change your tax return by completing Form 1040-X electronically. All commercial tax filing software accommodates this, the IRS notes. As electronic filing with the IRS has grown over the past 30 years, the 1040-X, the amended U.S. personal income tax return, was one of the last major tax forms. individuals who had to be filed on paper. Making the 1040-X an electronically filed form has been a goal of the tax software industry and tax professionals for years. The new electronic option allows the IRS to receive amended returns faster while minimizing the errors normally associated with manually filling out the form. Since tax filing software allows users to enter their data in question-and-answer format, it simplifies the process for them. It also makes it easier for IRS employees to answer taxpayer questions, as data is entered electronically and submitted to the agency almost simultaneously.
Taxpayers still have the option of submitting a paper version of Form 1040-X and must follow the instructions for preparing and submitting the paper form. Those who complete their Form 1040-X electronically and on paper can use the “Where is my amended return?“ online tool to check the status of their amended return. At this time, only the returns of Forms 1040 and 1040-SR for the 2019 tax year can be amended electronically. Further improvements are planned for the future. The IRS says about 3 million 1040-X Forms are filed by taxpayers each year.
There are plenty of good reasons to change. A good first step is to ask yourself if the return you filed was correct to the best of your knowledge when you filed it. If not, you should probably edit. If the return you filed was correct to the best of your knowledge when you filed it, you are probably sure that you are not filing an amendment. If you are audited, a change can also send the wrong signal, further compromising your position. So think carefully.
Of course you can want to to amend. Perhaps you realized that you made a mistake, forgot the payment or Form W-2, or forgot the income from a Form 1099 that you found in the back of a drawer. Mathematical errors are not a reason to file an amended return, since the IRS will correct mathematical errors on your return. Likewise, you should generally not file an amended return if you discover that you have omitted a W-2 form, forgotten to attach schedules, or other such issues. The IRS can process your return without them, or will ask for them if necessary.
You usually cannot correct a tax return without modifying it. However, there is an exception, if you act quickly. If you file a “replacement” return before the due date of the original return (including extensions), it can replace the originally filed return. Indeed, the “errors” of the original first statement did not occur. It can be used to make an election that cannot be made in an amended return, or to make certain other changes. But beware of this. The IRS may get confused if you try this unusual procedure. You may end up having a dispute (or at least correspondence or discussions) about which of the “original” statements is valid and whether an amended statement actually functions as a replacement statement. When and what proof of when you each filed is important.
Beyond this exception, you can only correct errors by modifying your return. If you later find that you made a mistake or receive a revised Form 1099 or K-1, the IRS tells you that you should to modify. But you do not have a positive obligation to file an amended tax return. But you can still want to To. If you do, you can’t choose. You can’t just make corrections that make you money, but not those that increase your tax liability. If you want to change, you must file a Form 1040X within three years from the date you filed your original return, or within two years from the date you paid the tax, whichever is later. Amended returns are prepared on Form 1040X, regardless of whether you have previously filed Form 1040, 1040A, or 1040EZ. If you are amending more than one tax return, prepare a separate 1040X for each return. If you file an amended return requesting a large refund, the IRS can examine the situation even more carefully. Alternatively, you can apply all or part of your refund to your current year tax.
Normally, the IRS has three years to verify a tax return. You might assume that filing an amended tax return would restart that three-year limitation period. Surprisingly, this is not the case. In fact, if your amended return shows a tax increase and you submit the amended return within 60 days of the three-year law expiration, the IRS only has 60 days after receiving the amended return. to make an assessment. This narrow window can present planning opportunities. Some people change a right of return before the law expires. Also, be aware that an amended return that does not show a net tax increase does not trigger an extension of the limitation period.
If your amended return shows that you owe more tax than on your original return, you will owe additional interest and possibly penalties. Even if you change a return two years ago, the due date for your original and payment return has long passed. Interest is charged on any taxes not paid on the due date of the original return, regardless of extensions. The IRS will calculate the interest and send you an invoice if you don’t include it. If the IRS thinks you owe penalties, it will send you a notice that you can pay or dispute.