When you put your tax return in the mail or click the "e-file" button on your software, you might feel like you're done for another year, but that's not always the case. If later you discover an error on your return, you don't have to dread the day the IRS finds it and comes knocking on your door, nor do you have to give up the big tax credit you missed. Instead, you can use your opportunity for a tax amendment, or multiple amendments, in order to correct any mistakes.
There is no limit to the number of times you can file an amended tax return. However, you must ensure that the amended return is filed within the established time frame in order to avoid penalties.
Finding Your Tax Amendment Options
The IRS doesn't put a limit on the number of times that you can amend any particular year's tax return, as long as you're filing within the statute of limitations. The time allotted for a tax amendment is the longer of three years from when you filed the return or two years from when you paid the tax, whichever is longer.
If you're using the filing date, remember that any return filed early is counted as being filed on the due date. For example, if you file your return on March 1 even though it's not due until April 15, your three years starts on April 15.
Looking for Additional Amendment Opportunities
If you find an error that causes you to owe more taxes, file an amended return and pay the additional taxes as soon as possible to avoid additional interest and penalties from accruing. For example, say you find a mistake that means you owe an extra $2,000 in taxes. If you're filing the amended return one year after it was due, you also owe a year's worth of interest. However, if you act quickly enough and submit the amended return before your filing deadline, you won't owe any interest because it's considered to be filed on time.
For example, suppose you filed your original return in February, but realized your mistake and filed the amended return before April 15. Since you amended and paid before your filing deadline, you won't owe any interest or penalties. Even if your amended return is processed first, the original return will eventually get processed, too, and when the IRS sorts it out you will have minimized your liability for interest and penalties because you filed the amended return sooner rather than later.
Obtaining the Amendment Forms
If you realize you did not include the right filing status on your return, or if your income, deductions or credits need correction, file the return with your tax amendment using Form 1040X, Amended U.S. Individual Income Tax Return. You can also use this form for amending an amended return. Usually, for a refund or credit, you must file this form within three years from the date you filed the original return or within two years after paying the tax, whichever is later.
Other Reporting Considerations
If you're receiving a refund on your original return, wait until that return gets processed before submitting an amended return. For example, say that your original return entitled you to a $1,000 refund, but then you realize you forgot to claim a tax credit that entitles you to an extra $500 refund. Wait until the first one gets processed before filing the amended return. Otherwise, your additional refund could be further delayed by additional processing times.
When you file a return with a tax amendment, it might get a little more scrutiny from the IRS, and you might have your original return double-checked, too. You probably don't have to worry about the extra attention turning into a full-blown audit, however, as long as the IRS sees that you're doing your taxes correctly (or trying to). Getting it right is the most important thing, even if it takes you several amended returns to do so.
- Internal Revenue Service: Topic 308 Amended Returns
- Internal Revenue Service: Amended Returns & Form 1040X
- Internal Revenue Service. "Instructions to Form 1040X," Page 3. Accessed Jan. 6, 2020.
- Internal Revenue Service. "Instructions for Form 1040X," Pages 7-8. Accessed Jan. 6, 2020.
- Internal Revenue Service. "Instructions for Form 1040X," Pages 8-9. Accessed Jan. 6, 2020.
- Internal Revenue Service. "Form 1040X," Pages 1-2. Accessed Jan. 10, 2020.
- Internal Revenue Service. "Amended Returns." Accessed Jan. 10, 2020.
- IRS. "IRS announces Form 1040-X electronic filing options coming this summer; major milestone reached for electronic returns." Accessed July 9 2020.
- Internal Revenue Service. "Instructions for Form 1040X," Page 7. Accessed Jan. 6, 2020.
- Internal Revenue Service. "Instructions for Form 1040X," Page 3. Accessed Jan. 6, 2020.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."