True story. I write about this stuff for a living, and I completely left out an entire W-2 from my taxes. Oops.
I discovered this mistake when my husband and I applied for a mortgage in April. I’d already filed the taxes, but couldn’t find the W-2 for a job my husband held for a short time at the end of last year. We’d remembered to put the job on our loan application, and the lender needed the W-2.
Turns out the employer never sent it. Employees are meant to log into their online system to print their own forms. We never found out about this because my husband had left the job before the first of the year.
Should I have realized this W-2 was missing when I filed using TurboTax, like I have for the past five years? Yes. But I didn’t.
Luckily, the IRS has a process in place for mistakes like this, and for even smaller mistakes like mistypes on your 1040. If you find yourself in a similar situation, here are the steps to take to amend your tax return.
Table of Contents:
Know when to amend your return
Clearly leaving out a major source of income for a tax year is a big deal. You should amend your return if you should ever make the same mistake I did. But you’ll also need to amend your return if you find errors in your filing status, number of dependents, total income, tax deductions, or tax credits, to name a few.
You don’t need to amend your return if you made minor math errors when filing. The IRS typically catches and corrects math errors for you. If the errors, once corrected, change your amount due or amount owed, you’ll get a notice from the IRS.
But know that it’s not always necessary
If you don’t notice you made a mistake or are missing a form on your taxes, the IRS will let you know. Their computer will match up your filing with the copies of form W-2 received from your employers, for instance. If you’re missing a W-2, the IRS can fix the problem for you and send a request for what your return is missing.
Still, it’s a good idea to file your return so that it’s accurate. In my case, we needed the corrected forms to continue our mortgage application process.
Resource: Check out today’s low mortgage rates to see if a refinance can save you money.
You’ll have three years to file
You’ll have up to three years to file your amended tax return to fix old errors. Typically, though, the IRS is going to find and correct your large errors before this point.
But there are some tax filing errors that will work in your favor, once corrected. For instance, say you forgot to claim a large charitable donation in 2014. Claiming the donation could reduce your tax liability for that year. So even if you’re just noticing the mistake now, you may want to file an amendment.
Generally, you’ll need to file your amended return within three years from the date you file your original tax return or within two years from the date you paid the tax, whichever is later. These dates can vary, so consult with a tax professional if you’re not sure.
Getting (or paying) more money
If amending your taxes will give you additional refund money, you should wait to file the amendment until after you have your original refund check. Go ahead and cash that check. Then file your amendment. The IRS will send you additional money you’re owed when they process the amendment.
If you need to pay additional taxes, file your amendment as soon as possible. If possible, send your additional tax payment with the amendment. This will limit interest and penalty charges you’ll pay for not having your taxes paid in full by April 15th.
Processing time to expect
These days, an e-filer can get a refund within a week or less. That’s not the case with amended returns though. They usually take about 8 to 12 weeks to process, so it could be a while before you get that additional money.
How to file the amendment
To file your amendment by hand, you’ll need to use Form 1040X. It basically has all the same fields as a normal 1040, but it includes extra columns. Column A is where you put the original amount. Column B is where you put the net change in the amount. And column C is for the corrected, final amount.
You can also check out the instructions for filing this form for a step-by-step guide.
But here’s my second confession of the day: I didn’t use this form on my own.
Since I’d filed electronically before, I was able to just amend my taxes through TurboTax. In fact, most online tax filing platforms — like TurboTax, HR Block, and TaxAct — will allow you to file an amendment. You just put in what’s changed, and they’ll fill out form 1040X for you.
If you used a tax filing software or worked with a tax professional originally, I’d recommend going that route with your amendment, rather than filling out 1040X by hand.
You may only need to fill out form 1040X in order to file your amendment. But if your changes relate to another tax form or schedule, you’ll need to update copies of that, as well. If, for instance, I’d left out income from my business, I’d need to update Schedule C and attach it to form 1040X. Failing to attach updated schedules will slow down processing time for your amendment.
While you can fill out your amendment online using your normal tax software, you can’t e-file it. Unfortunately, you’ll have to print out the forms and mail them in to the IRS.
And even after you mail in your forms, you may get additional forms to sign if the IRS is still missing information. For instance, I just received a form for myself, my husband, and two witnesses to physically sign and send back into the IRS with 30 days. So if you do amend your taxes, keep an eye on the mail for anything coming in from the IRS!
Use the “Where’s My Amended Return?” tool
The IRS offers a tool that will let you track the status of your amended tax return online. The “Where’s My Amended Return?” tool will work with amendments filed through Form 1040X. Your amendment may not show up in the tool for three weeks after you mail it. But once it’s in the system, you can see if your amended return has been received, is being adjusted, or is completed.
Correcting state taxes
Major changes in your federal tax return may affect your state tax liability, too. Amendment rules and processes vary from state to state. So any time you amend your federal tax return, check with your state tax agency about the processes you’ll need to follow there, too.
A final note
When we discovered my big ol’ tax filing error, my husband was really worried that we’d get in big trouble with the IRS. But the fact of the matter is that mistakes like ours, and even larger ones, happen every year around tax time.
Typically, the IRS will catch these mistakes and give you a chance to correct them before taking any major action. If you filed your taxes in good faith and truly didn’t know you were making an error right away, they’ll give you time to fix the problem.
However, this doesn’t mean you should put off correcting the error. The longer you wait, the hairier the amendment process can get, especially if you wait more than the two or three year limit. And if your amendment means you owe more money, you’ll just pile on the fees and charges by waiting a long time to amend your taxes.
So if you’ve discovered a mistake on your taxes, start working on that amendment today!