When you have a tax “oops” you fix it by filing an Amended Tax Return, form 1040X.
Mistakes happen. You file your return and later get a W2 in the mail for a job you had forgotten about. Maybe your investment firm sent you an amended 1099 because your interest income they reported was wrong. Or maybe you were talking to a friend and learned about a deduction that you should have been claiming for the past three years and you’d like a refund. What do you do?
It’s easy, you need to file an amended return, the form is called a 1040X and you can find it on the IRS website: http://www.irs.gov/pub/irs-pdf/f1040x.pdf.
An amended return can’t be filed electronically like a regular return. You must mail it in and it’s going to take about 12 weeks to process. That’s a bummer if you’re expecting a refund, but that’s the way it works. If your regular return had a refund, make sure you wait until you’ve received the first refund before you file the amended return. (If they start processing the amended return before your original refund gets paid, it can mess up you getting the original refund. You don’t want that to happen now do you?)
If you have more than one tax return that needs to be amended, you must file separate returns for each year and mail them in separate envelopes. For example, say you found out that you had missed a $1000 deduction on your Schedule A every year and you’re in the 25% tax bracket. You can’t just put $3000 on this year’s return for a $750 refund. You’ll have to amend 2010, 2009, and 2008 separately and you’ll receive three checks for $250 each. It’s too late now to claim a refund that should have gone on 2007.
When you amend your tax return, you’ll have to send in the schedules of anything that changed. In the example above, the thing that changed was on the schedule A, so that form would also have to be attached. Don’t attach any forms that didn’t change. Warning: for many folks, a change in one part of your tax return can cause a change somewhere else-most notably on your schedule A. Before you actually mail anything in, go over it carefully to see if you have any unexpected changes.
When you file a 1040X, make sure you check the box for the tax year that you’re amending. That’s a pretty common mistake. The IRS can’t process the return if they don’t know what year it’s for.
When not to file an amended return: You don’t need to file an amended return for a basic math mistake. The IRS will automatically fix that for you. You also don’t need to file an amended return if your original was missing a schedule. That’s where you get a letter from the IRS saying that you claimed something on your return but that you’re missing the supporting documents. A common example of that would be a capital gain of $2000 on your return, but there’s no schedule D to back it up. You don’t need to amend the return, just mail them the schedule D. The IRS will ask you for whatever schedule they’re looking for, you won’t have to guess at what’s missing.
I’ve talked a lot about filing an amended return because of a refund. Sometimes when you file an amended return you’re going to owe. If you have a balance due, mail the payment check with your 1040X. The IRS will probably send you a bill for interest and maybe even penalties depending upon how much you owed. Be prepared for that.
Often times, people are thinking about filing amended returns because they received an IRS letter. Sometimes, you don’t need to amend, just pay the tax. Sometimes, you really need to amend because you shouldn’t have to pay the tax but you need to submit more information. Sometimes, you don’t need to amend and you don’t need to pay the tax—the IRS made a mistake and they just need to have it pointed out to them. Before you start writing that check, get a professional opinion–you want to pay your fair share, not more than you owe.
Hi Ashley,
Generally, the late payment penalty is 1/2 of 1% of the new amount that you owe per month with a maximum penalty of 25%. So, your penalty could be as much as $1450. Ouch! But – you sound like a pretty honest person who always files on time. And this was a genuinely honest mistake. You may be able to ask the IRS to “abate” the penalty. What you do is call them up, explain the situation and ask for a “first time penalty abatement”. If you’ve never had an IRS issue before, they are usually pretty nice about it. (Yeah, I used the word “nice” when talking about the IRS. This is one time where they usually are nice!)
The thing you have going for you is that YOU found the mistake and YOU corrected it! YOU are the GOOD person here! So don’t be afraid to ask. You did the right thing. I understand how the IRS can give you panic attacks. They can be scary. But, in this case, you have done nothing wrong. You made a mistake and you fixed it. You have every right to ask for an an abatement. Good luck!
Hello, I have a question regarding my 2017 taxes. I am self employed and accidentally forgot to include a 1099k form for income, I have several 1099ks and this one was not put in and I didn’t catch it. I always go to Jackson Hewitt and have had the same preparer for years and years and this has never happened before and I have been so upset and overwhelmed about it, as far as going on anti- anxiety medication because it was giving me panic attacks. I called my tax preparer as soon as I realized the mistake and she said it was no big deal and we amended it and I ended up owing an additional $5,800 on top of the tax I had already paid. I am still waiting for the amendment to be adjusted and completed and wondering how much in penalties I will end up paying? Thanks for any help!
Hi Dee,
You definitely want to amend your tax return. Correct the Schedule D, and the 8949 that goes with it. So yes, you’ll have to include all of the other 8949 items on your return with the amended return. Sorry.
Hi Shawn,
If your preparer had the wrong social security number on your return, how did it get e-filed? It should have been rejected. In which case, you just correct the social and re-file. But, if it went through, or it got paper filed, you probably need to amend it. Let the IRS know what the correct social security numbers are. You want to get credit to any taxes that you did pay – and of course, get any refund that is due to you.
Hi Jackie,
First, go ahead and file your 2017 return just to get it done. But about 2015 – even though you have 3 years to amend your return to claim a refund, if the IRS thinks you owe them money – they will do whatever they think is necessary to start collecting that money right away. So they think you owe them $7200 – they want it now. Not three years from now.
Hi Tori,
I apologize for answering this so late. And now I’m giving you a lame answer to boot: it depends. (Told you it was a lame answer.) Sorry. Let me explain. You said kids – plural, so absolutely the most you can get for a child care credit would be $1,200. So to get a $1,200 credit – you would have spent at least $6,000 on day care. So if you reported something like $12,000 for daycare costs but you only spent $8,000 — well then, it’s not worth amending your return because it doesn’t change anything.
Now if for example you claimed something like $5,000 in daycare expenses, but only spent $2,000 – well then you probably need to amend- because in that situation your childcare credit amount would change. It’s possible, there are some scenarios where even in that situation, it would not affect your final balance due – but you’d have to prepare the whole return to know that.
Bottom line – if you actually spent less than $6,000 on the daycare – then you should amend your return.
I got a letter that there was an error on our 2016 Schedule D. My brokerage firm acknowledged they missed sending me the 1099 for my RSU sales, so that data is not on our return. Of course, the IRS assumed all the transactions on that 1099 were a zero cost basis, and have sent a bill. Since we file jointly, most of the Schedule D is correct, just missing the items from this one 1099. Do I have to recreate the entire Schedule D with both our info, or can I just send the missing 1099 that shows the correct cost basis on the missing items, which I think will reduce what we owe them?
What if my tax preparer put one wrong social security number do I have to file a amended return
I have a amendment for 2015 and the IRS has sent me a correspondence for $7200. Well, if I have 3 years to amend it why did I receive that form? Also, I have yet to file my 2017 taxes because of this issue. Should I hold off and wait to hear from the IRS about the amendment first or should I go ahead and file?
Hello i filed my taxes on feb 11 i made a error for child care my kids attend day care and yes i pay for day care but since we just moved i didnt pay that much for this new school i used turbo tax my taxes was accepted but no refund date what should i do
Hi Alex,
When the IRS “accepts” a return, it means that the social security numbers used on the return match their data base and another return has not been filed under those numbers yet.
“Processed” means that they have run it through the system and determined that they should pay the refund, on if a balance is due, acknowledge that the return has been filed and record the balance due.
Sometimes, the IRS finds errors in the return and the refund is less than expected. But often, errors aren’t found until much later with the document matching system. That’s why you’ll want to file an amended return – unless of course the IRS already has discovered the error – but that’s unlikely in your case (at least I think it is.)
Thanks for the response Jan. So what is the difference between accepting the return, and processing the return?
I will be getting this money regardless then, even if it has been accepted and not processed/approved yet? I will just have to file an amended return shortly after.
Thanks