How to Amend Your Tax Return

From the surprising info vault: Amending a tax return to claim home-related tax deductions or tax credits is pretty easy. 

Filing an amended form should take you about as long as it did to prepare the form incorrectly the first time. And you can file an amendment at any time of year. Just do it before the window of opportunity closes:

• Within three years of the date the original tax return was due or

• Within two years of the date you paid the tax, whichever is later.

The window goes from three to seven years in the case of deductions for bad debts or worthless securities. But that’s another topic.

Here’s How to Amend

Example: Amend a return to claim your property tax deduction. (Although if you forgot a deduction that large, it’s time to hire someone to do your taxes for you.)

1. Transfer the information from your old Schedule A, which itemizes your deductions, to a blank Schedule A for the year you’re amending. But change the property tax line to include what you paid.

2. Copy the info from your old 1040 onto Form 1040 X, aka the amended U.S. individual income tax form.

3. Change the itemized amount you can claim on your 1040 X based on your new Schedule A.

4. Recalculate how much the IRS owes you.

5. Send your amendment to the IRS by mail. It won’t accept electronic amendments.

6. Include copies of the forms or schedules you’re changing.

7. Expect to wait about eight to 12 weeks for the IRS to process your amended return.

8. Amend your state return, too, because changes in your federal return can affect your state one. Visit your state tax agency website for info on how your state handles tax amendments.

A Note About Tax Forms

Form 1040 X applies to any year you’re amending. But for schedules and forms, like Schedule A, Form 5695, and Form 4684, use the instructions and forms specific to the year you’re amending.

Is It Worth It to File an Amended Return?

If you go DIY on taxes, only you can say where your pain threshold intersects with your wallet. Would you spend an hour to get $50 back? If you pay someone to prepare your taxes, make sure whatever you’re paying them to file the amendment isn’t more than what you’re going to get back.

Just know that amending returns invites the IRS to take another look at your complete tax return for the year you’re amending, says San Jose, Calif., CPA Daniel D. Morris. So keep handy the receipts, W-2s, and other documents for all parts of your return, not just the part you’re amending.

This article provides general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice.