Form 1040X Amended U.S. Individual Income Tax Return is a two-page document issued by the Internal Revenue Service (IRS) for taxpayers who need to correct their previously filed returns for any reason.
Unfortunately, the IRS’s instructions for Form 1040X is over 17,000 words—19 pages of single-spaced, two-column, 10-point font. While exhaustive, for small-business owners or independent contractors who just discovered they made a mistake on their taxes, that can feel daunting.
The good news is it doesn’t have to be. Let’s review the steps for using and submitting a Form 1040X amended tax return.
This past holiday season was Anna Carlyle’s best ever. Sales for her pet grooming supply company skyrocketed. The downside of that unexpected growth is that it left her inventory depleted and she’s been scrambling to restock. She’s also been doing her best to build on the momentum of her end-of-year traffic.
Now it’s April, and Anna realizes—as she’s finalizing her books—that she made a mistake on the tax return she hastily submitted in February. As if tax season wasn’t bad enough, now she has to do it all over again?
Not so fast. The IRS has a dedicated process, Form 1040X, precisely for individuals who discover they need to submit an amended return.
When do you need to file an amended return?
The IRS will typically catch any common math errors when verifying the numbers on your return. If you find you made an error, but have already received a notice from the IRS that states the error has been corrected, you’re probably fine.
However, in the event that you find a mistake on your tax return, don’t panic. 1040X will work perfectly as long as you:
- Filed Form 1040, 1040A (1040-A), 1040EZ (1040-EX), 1040-NR, or 1040-NR-EZ
- Received a refund or made a payment using those forms within three years
- Need to correct elections, filing status, or claims for unused credits
You will also need to have a copy of the amended forms you are seeking to update. If, for example, you’re issued a corrected W-2 or 1099, you need to include the new form with your amended return. Failure to include these supporting documents might be cause for the IRS to reject your 1040X or delay its processing.
What is Form 1040X?
If you filed a Form 1040, then you are familiar with this individual tax return form. It is frequently used by sole proprietors, independent contractors, entrepreneurs, and small business owners. As long as your business passes through profits and loss to you directly, then you more than likely filed a Form 1040 and posted your business revenue and expenses to Schedule C of the 1040 form.
Form 1040X addresses any changes to a previously filed Form 1040.
Similar to 1040, it will ask for your address, name, social security number, filing status, and income. In addition, the form has a new column for “Net change” in any of the following categories:
- Income and Deductions
- Tax Liability
- Exemptions and Deductions
This column allows for the IRS to easily skim the form to determine what changes they are looking for and if you now owe the government money or they owe you money.
The other differences are in Part III of the 1040X. This section is where you explain the changes to your tax form. You will also need to attach the revised documents that show the updated information.
How do you file 1040X?
- Form 1040X cannot be filed electronically
- Keep a copy of your 1040X with any supporting documents
- Processing by the IRS can take up to 16 weeks for amended returns
- Three weeks after submitting, however, you should be able to check the status at Where’s My Amended Return? or call 866-464-2050
If you owe the government money, pay it immediately. The IRS does not offer a grace period for tax payments, and fees begin accruing the day the balance is determined and entered into the system.
While it may seem daunting to have to file an amended return with the IRS, it’s actually a fairly easy process.
For Anna—as well as for you—just be sure to have all of your revised information in hand, as well as a copy of your previously submitted tax return. Then you should be able to just plug in the old numbers and new numbers, and you’ll be all set.