A taxpayer who discovers an error after filing his or her income tax return may need to file an amended return. A change in filing status, income, deductions, or credits would require an amended return. This could happen, for example, if an investment broker sends a corrected Form 1099 that changes the amount of dividends or capital gains earned by the taxpayer. Or a taxpayer who sold stock may recalculate the basis of the stock for determining gain or loss. A taxpayer amending his or her federal income tax return may also need to amend a state tax return, to reflect the change or correction.
An amended return would be needed if a partnership sends a corrected Schedule K-1 showing the amount of income or losses earned by the partnership. This could also happen if the partnership is slow to provide Schedule K-1 to its owners or beneficiaries, and the taxpayer files an income tax return before receiving the K-1.
Taxpayers use Form 1040X, Amended U.S. Individual Income Tax Return, to file an amended return. Form 1040X can be used to change a previously filed Form 1040, 1040A, or 1040EZ. Form 1040X cannot be filed electronically; the instructions for Form 1040X indicate where to file the form. Taxpayers should file a separate Form 1040X for each year being amended, and mail each form in a separate envelope.
At the top of the form, the taxpayer should enter the year of the return being amended. Form 1040X has three columns for reporting the change or correction. Column A is used to show the amount(s) reported on the original return. Column C shows the corrected figures. Column B shows the difference between Columns A and C. On the back of the form is an area where the taxpayer can explain the specific changes being made and the reason for each change. The taxpayer should attach a copy of any form or schedule that is affected by the change.
To claim a refund, a taxpayer must file Form 1040X within three years after the date the original return was filed, or within two years after the date the tax was paid, whichever is later. Returns filed before the due date (without regard to extensions) are considered filed on the due date. The IRS indicates that it may take up to 16 weeks to process an amended return.