People make mistakes. Taxes are no exception. Whether you’ve overpaid or underpaid, there are certain tax filing mistakes that allow you to amend the tax return. Though not all mistakes are forgiven and granted an amendment, the vast majority of mistakes are covered through these amendment reasons. But before we get to that- let’s talk about the basics.
A tax amendment is there to help you pay the right amount of money or get the right return. Smaller mistakes like basic math or missing forms are usually handled by the IRS. They’ll correct your basic math or send a notice asking you for missing forms. Larger mistakes (aka the kind that benefits from a tax amendment) typically fall into one of the following ‘reasons:
- To Change Your Filing Status: For some, this is due to personal reasons such as a divorce. For others, it’s a simple mistake after a separation.
- Correct Your Income Reporting: Cash isn’t exactly “off the books”. Gambling winnings and the couple hundred bucks you gained from taking down a few trees for the neighbors are both taxable income.
- Correct Your Deductions: Miss a deduction? Report the wrong number?
- Correct Your Credits: Tax credits help a lot of homeowners manage their tax bills.
When you amend your tax returns, your modifying a tax return that the government has already accepted. You cannot amend a tax return that has a pending status and more obviously, you cannot amend a return you haven’t filed.
If you need help with filing tax returns, turn to professional services. If you’re in a situation where an amendment makes sense, you’re likely to benefit from hiring a tax professional to assist you during tax time.
How Long Can You Amend Tax Returns?
Much like every operational process at the IRS, there are specific rules surrounding the time sensitivity of tax amendments. According to the Silver Tax Group:
“You can amend your taxes up to three years from the date you filed the original return and up to two years from the time you paid that year’s tax.”
To put that in perspective, if you need to correct a part of your 2017 taxes you can do so before Q2 in 2020. If you’re trying to fix tax records from before the threshold, you’ll need to hire a tax attorney to help you come to a resolution with the IRS.
Is There Any Risk Involved?
Many taxpayers worry about whether or not amending a return will result in an audit from the IRS. The simple answer is no. The outlier is if you knowingly report the wrong information.
It’s highly unlikely that the IRS will audit you for attempting to correct your records. Unlike many processes at the IRS, amendments are processed by real people. These real people are able to see that you’re trying to make a mistake right. You will not find a single credible source that draws a correlation between tax amends and tax audits.
How Do I Submit a Tax Amendment?
Despite e-filing being a great way to reduce your chance of tax filing errors, you cannot amend your taxes digitally. To file you need:
- A printed copy of the 1040X
- The associated documents (proof of deduction, credit, income, or filing status).
Once you’ve filled out your form, mail it to your appropriate IRS office with the supporting documents. Do not staple them together. The IRS may take up to sixteen weeks to process your request. From there, you’ll receive your refund or likewise, the amount owed to the IRS.
Conclusion: Amend Your Taxes and Try to Prevent this in the Future
Correcting your tax records is an admirable and important step of preventing audits and strengthening your financial future. Though there are processes in place to assist you when you make a mistake, it’s important to try and avoid mistakes in the future.
If you’re still filing with paper mail, make the switch to e-file. Know your tax rate. Keep track of your income and don’t forget about any gambling winnings or charitable donations when tax season rolls around. Spending the time throughout the year to stay organized will help tax time move smoothly and prevent you from filing future amendments.
Have you made mistakes while filing a tax return? Did you decide to amend your return yourself or use a professional? Share your experience in the comments.