Tips in Filing for an Amended Tax Return

You may face substantial IRS problems in the future for discrepancies detected in your tax returns. Therefore, it is always in your best interest to file an amended tax return if you discovered that you have some errors on last year’s tax return or the one you just sent through the mail. If the errors are purely mathematical in nature, the IRS simply corrects these and you don’t need to file for an amended tax return. However, certain circumstances require that you file an amended tax return as doing otherwise could give you problems.

A number of these errors are discrepancies pertaining to your deductions or credits, your total income, your dependents or your filing status. When you send a corrected tax return to the IRS, you may even be able to receive a refund. But if the mistake you made doesn’t lead to you receiving more money, and in fact incurs any penalties, it is best to own up to that mistake as well.

The form you have to use to file a corrected or amended tax return is Form 1040X, Amended U.S. Individual Income Tax Return. This, in effect, corrects the discrepancies filed under Forms 1040EZ, 1040A, or 1040 Amended tax returns should always be submitted through the mail. Electronic 1040X forms are not yet compatible to the IRS’ e-file systems. In the 1040x, you are simply asked to identify the data that need to be amended and the reasons for the requested adjustments.

The usual reasons to filing for amended tax returns include a correction in filing status. Usually, taxpayers need to change from a single filer to a head of household filer. Such change entitles you to a refund as there is a substantial difference in the deductions available to those who are eligible to head of household status.

If you have diligently paid the taxes on the tax return in question, you may file for an amendment within the three year period following the return’s filing date. Otherwise, your grace period is reduced to only two years.

If you’ve just filed and you have discovered an error, you may want to wait until you receive your refund and all of the paperwork for that tax return has been processed before filing an amended tax return. This eliminates the possibilities of confusion regarding tax records and duplication of paperwork, which in general, pose a serious IRS problem.

On the other side, there are instances when additional costs are incurred when filing for an amended tax return. No matter how attractive the choice of simply running away is, honesty and filing for an amended tax return will always pay off in the long run. This will truly avoid future problems as the IRS will eventually find out about this error. In addition, the IRS can charge you with more lenient fees if you choose to initiate the move of bringing your mistakes to their attention.