The Internal Revenue Service (IRS) recently announced a change in the process for amending forms and corrections filing. Here’s the latest on this change and the changes related to it.
You Can Now Amend Taxes Electronically
Recently, the IRS announced that you can amend taxes electronically for Forms 1040 and 1040-SR for the tax years 2019, 2020, and 2021, as well as Forms 1040-NR and 1040-PR for the tax year 2021.
The IRS also shared information that a new checkbox was added to the forms listed above in order for taxpayers to indicate that a superseding return is being filed electronically.
Form 1040-X is the one that allows you to amend taxes should you have a need, and you are still able to file a paper copy if you’d like. The IRS just expanded the ability to amend taxes to include electronically, too.
When You Should Amend Taxes
There are several instances where you should amend taxes. The following situations are all worthy of an effort to amend taxes:
- You noticed you’ve missed an opportunity to claim a tax deduction or credit – whether the amended refund you get will be substantially or even slightly larger is of no consequence. If the deduction or tax credit is worth it to you, you should do it – and it’s even easier now because you can amend taxes electronically.
- You chose the wrong tax filing status by mistake. You don’t have to keep the same status year after year, and it’s easy to get into a routine and forget to double-check this information.
- You have added or removed dependents in your living situation but haven’t reported that change on your tax return.
- You forgot to claim taxable income on your tax return. It’s easy to forget and lots of people have side hustles. Make sure yours are included, even if they aren’t a huge or majority percentage of your overall yearly earned or passive income.
- You mistakenly claimed an expense, deduction, or credit that you aren’t actually eligible for at this time.
Math or clerical errors are often caught by the IRS and do not typically necessitate the need for you to amend your taxes or to re-file.
It’s also important to remember that you should only begin to amend taxes once your original return is already filed and has been processed by the IRS.
Quick Guide for Amended Tax Filing Process
We also wanted to share a quick how-to for the amended tax filing process. You’ll need to have your original tax return, as well as any supporting documents that are pertinent to your amendments. These could be things like an amended W-2 or 1099, or new documentation to report the deduction you’re trying to claim.
If you filed a return and it has missing or incorrect information, you’ll use Form 1040-X to report important changes. This form has 3 columns, and here’s what they’re each used for:
- Column A shows the previously reported numbers from your tax return.
- Column B shows the necessary increase or decrease that must be made to correct the incorrect information from your first return filing.
- Column C shows the correct amount that should be reported – you can get this amount by adding columns A and B.
You’ll then use Part III of the form to explain why you needed to file an amended return. You can then file your amended taxes electronically, using the same system or provider you used for your initial filings (if possible). You’ll also have to attach any necessary documentation like the forms we mentioned at the top of this section.
Suppose you amend taxes electronically and have found that you still owe money because the corrected tax bill is higher than your original return. In that case, you will also need to submit an additional tax payment based on that discrepancy.
Are There Reasons an Amended Return Can’t Be Filed Electronically?
There are many instances where your amended return would not be eligible for electronic filing. The years and forms listed above are the only ones that are eligible.
Also, if you are amending a prior year’s return, and the original return was filed on paper during the current processing year, you will have to file by paper, there is no electronic option available. So, essentially, if the return started on paper, it can’t be amended electronically (per the current guidelines). Right now, there is no time difference in the processing of electronic amended returns versus paper returns.
You can always reach out to your trusted tax preparer or CPA with questions or concerns. The IRS also has an FAQ page that addresses the new policy regarding amending returns electronically.
Organize and Update Your Information Returns with Ease
eFile360 is the perfect partner in your tax amendment process. Because you can use our services to organize past returns and IRS forms, you can easily double-check your forms and use them to fill out the amended return.
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