It’s best to get your tax return right the first time, but mistakes happen. When they do, it may be necessary to file an amended return.
An amended return is a taxpayer’s opportunity to receive any unclaimed refund or correct an instance of underpayment after they’ve filed — and the due date to file has passed.
Why File an Amended Return
If you find a mistake in your tax return, you can submit an amended return.
Some tax professionals note an increase in the number of amended returns in recent years due to the COVID-19 pandemic and Internal Revenue Service delays.
But even though most of the special tax benefits from COVID-19 relief expired at the end of 2021, you may still have time to benefit from them by filing an amended return. You generally have three years after the filing deadline to do so, which means that you can still amend returns for 2020, 2021 and 2022.
Taxpayers often amend returns because reissued or amended forms may come later in the filing season or after the filing deadline. In addition, job changes, health issues and other life events that lead to tax consequences taxpayers may overlook can lead to amended returns.
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You may also find that after the filing deadline you qualified for tax breaks you missed, which means you can amend your return to receive a refund.
“If correcting the mistake will generate a small refund, the taxpayer may not want to spend the amount a preparer would charge to fix the error,” Trish Evenstad, enrolled agent at Evenstad Tax & Financial Services in Wisconsin, says. “If the mistake will generate a balance due for the taxpayer, however, it is best to file the amended return.”
How to File an Amended Return
To amend a return, first gather relevant documents. For example, if you failed to report a portion of your income last year, you might include the omitted W-2. Then, use Form 1040-X to amend your return.
You can submit your amended return electronically or by mail, but experts suggest doing it electronically whenever possible. You can file an amended return for 2020, 2021 or 2022 electronically as long as you e-filed the original return, Evenstad says.
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“The IRS is becoming more electronically driven and has the ability to track and monitor changes to returns and mismatch of information faster than ever,” John P. Schultz, CPA at Genske Mulder & Company in California, says.
“If you receive new information that does not match your original filing and it creates an additional liability, the IRS will come knocking on your door with penalties and interest requests in hand, so it’s always better to stay ahead of their actions and have them in your good graces,” he adds.
Tax professionals can help taxpayers respond to correspondence from the IRS regarding any errors in previous returns, determine the tax liability implications of a newly discovered mistake and execute the appropriate amending or superseding process.
What to Expect When You Amend a Return
You can file an amended return within three years of the date you filed your original or within two years after the date you paid any taxes you owe — but the sooner, the better.
“As soon as they discover the mistake you should take action to correct it,” Evenstad says. “Penalties and interest are accumulating every day, so the sooner the better to fix a mistake.”
The IRS says it takes about four months to process amended returns but be aware that it could take much longer.
“If everything is OK, they should process those electronically filed amended returns within a 16-week period. That’s the goal they set for themselves; however, they also say if there are more errors or special circumstances, it could take longer,” Larry Harris, former director, tax services at Parsec Financial in North Carolina, says. “If that’s the case, I think it goes into a pile, the IRS has to correspond with the taxpayer and that could go on for years.”
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How to File an Amended Tax Return originally appeared on usnews.com
Update 06/22/23: This story was published at an earlier date and has been updated with new information.
