With just days left before the April 15 tax deadline, most people have either already filed their 2018 tax returns or have asked for an extension. The IRS had received almost 93 million returns as of the end of March, and millions more come in each day during the first couple of weeks of April.
It's everyone's goal to make sure that they file a complete and correct tax return the first time around. However, whether it's due to a simple mistake, vital tax information that comes in late, or an amendment to a key tax form that you had to reason to expect, there are times when you'll realize that the return you filed isn't accurate. When that happens, you'll need to amend your tax return -- and while that might seem intimidating, it doesn't have to be.
The basics of amending your return
To amend your federal tax return, you'll need to take a look at IRS Form 1040X. This form tries to keep things as simple as possible, giving you an opportunity to enter key information on income, deductions, tax liability, and payments.
The format of the form includes three columns. In the first, you'll put the original incorrect amount that you reported on your initial tax return. The second column includes the adjustment that you'll need to make to that incorrect number in order to come up with the accurate figure. The third column then gets the corrected numbers, and you'll be able to compare your new tax liability with what you initially reported in order to figure out whether you need to pay additional taxes or can expect to receive a refund.
In some cases, you'll also need to provide supporting documentation or additional information. However, the form itself provides an area in which to explain the reason for the changes, and many taxpayers find that adequate to address their concerns and tell the IRS what they've done and why.
Do I really need to amend my return?
Going to all the trouble of filing an amended return might seem like overkill in some situations, but often, it's the only way to comply with the tax laws. Moreover, there are other cases in which you could choose not to amend your return, but failing to do so will cost you a valuable tax break.
Unfortunately, the first set of situations in which an amended return is necessary is typically beyond your control. All too often, an employer will make a mistake on a W-2 form and only later catch their mistake. If that happens, you'll get an amended W-2 with different information, and if you've already filed your return based on the original W-2, then your tax calculations will be wrong. The reason why this situation is so unfortunate is that if you don't file an amended return, the fact that the IRS received the amended W-2 from your employer will raise a potential red flag. A similar thing can happen with your investments, when financial institutions realize late in the process that they need to change what they've already reported to you on various 1099 forms.
The more desirable reason to file an amended return is when you hope to take advantage of opportunities for tax savings that you missed earlier. With so many different deductions, credits, and other favorable tax breaks, it's easy to overlook one -- especially with all the new tax laws on the books for the first time this year.
Is there a deadline for amending a return?
After a certain period of time, you can no longer amend a return. Typically, that deadline is three years after the original filing deadline for the tax year in question. So for instance, if you want to amend your tax return for 2015, then you'd need to get it done by April 15, 2019 -- because that's three years after the original mid-April 2016 due date.
If you're dealing with a problem with this year's tax return, then it sometimes pays to build in a short delay before amending your return. The last thing you want is for your amendment to get there before the original return is fully processed, because if that happens, it can throw a wrench into the IRS process.
Do the right thing
If you need to amend your return, don't let yourself get intimidated by the process. It's not exactly fun, but it's also not terribly difficult, and in some cases, it can allow you to claim a tax benefit you'd otherwise miss out on getting.
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