Oops! How to Correct a Mistake on Your Filed Taxes
Sending off your completed tax return is an amazing feeling. Goodbye to all that work until next year!
That is, until you realize you’ve made a mistake.
Mistakes happen. So the IRS has a special form just for you: the 1040X. It’s what you use to file an amended return.
Should I File an Amendment?
File an amendment if you:
- Claimed a dependent you shouldn’t have, or now realize you can claim a dependent you didn’t
- Need to change your income, like if you forgot to report some freelancing gigs or interest income
- Need to add or eliminate credits or deductions
- Need to change your personal exemptions
- Need to report additional withholding
Don’t file an amendment if:
- You made a math error in adding or subtracting line items. The IRS will correct these for you.
What if you made a mistake that means you owe the IRS more in taxes, but the IRS didn’t notice? Can’t you just let it slide?
Bad idea. Besides the fact that this is tax fraud, if the IRS does discover this, you will have to pay the tax you owe plus interest that has accrued on it. It’s worth it to make sure you’re all buttoned up.
When You Can File an Amendment
If you filed before the deadline (which is usually April 15th), then you have three years from the deadline date.
So, let’s say that back when you filed taxes in 2010, you failed to claim a deduction for closing costs you incurred in 2009 (and you realized this after reading our post for homeowners). You can file an amended return to claim that deduction up until April 15th 2013, which is three years after the April 15th, 2010 filing deadline.
Let’s say you had a similar situation as above, but you couldn’t pay your taxes outright. You ended up paying the IRS in installments and finally paid off the last of your taxes in June 1, 2011. The IRS gives you more leeway here, giving you two years from when you paid off your taxes or three years from the filing date—whichever is longer—to file an amendment. So in this case, you can file an amendment up until June 1, 2013, which is two years after you finished paying for your 2009 taxes. (Find out what to do if you owe taxes and can’t pay.)