How to Amend Your Tax Return

Income Taxes, Taxes
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amend-tax-return

By Kathryn Hauer, CFP, EA

Learn more about Kathryn on NerdWallet’s Ask an Advisor

You’ve submitted your tax return and the refund’s in the bank. Then a W-2 or a 1099 income tax form arrives for work you totally forgot about. Or your mom sends you a form showing interest income for your savings bonds, which she cashed in for you. You realize that you need to change your tax return, but how? You must submit an amended tax return.

Creating an amended return is not hard and doesn’t take long, but you must do it — the Internal Revenue Service will come after unpaid taxes. If it’s filed after the deadline and you owe taxes, be aware that you will have to pay interest on the late payment.

Follow these steps to amend your tax return.

1. Make sure the IRS has completed your return

Once you hit “submit” in an e-file tax program, your return is submitted just as if you had dropped it in a mailbox. The only way to change it or fix it is by doing an amended return, but you shouldn’t begin to work on one until you know the IRS has completed your original return. Wait to do your amended tax return until you receive your refund or, if you owed money, until your payment clears your bank.

2. Complete Form 1040X

You can find the 1040X form and instructions on the IRS website. The 1040X is a simple, two-page form that shows what has changed from your original return. You’ll refer to a copy of your original return to fill it out.

You may need to include copies of other tax schedules, such as Schedule A if your itemized deductions changed or Schedule C for self-employment income of more than $400. (Make sure you understand the difference between W-2 and 1099 income.) But you will likely only need to submit the actual two-page 1040X form.

Even if you paid to have your taxes done the first time, you can probably figure out how to complete the 1040X on your own. And if you do make a mistake, the IRS will alert you and let you know if you owe more money or if you have overpaid.

3. Make a payment

If you owe the IRS money, you will be able to pay online, by phone or by mail. You can pay the amount you owe using Direct Pay or the Electronic Federal Tax Payment System. You can also enclose a check with the 1040X form when you mail it. If the IRS owes you money, it will mail you a check.

Keep in mind that the IRS charges interest on taxes not paid by the due date and may assess penalties as well. If you pay only your additional taxes after the IRS deadline, you’ll pay interest on just that amount, not on your entire year’s tax bill.

If you don’t pay the additional amount due on Form 1040X within 21 days of filing your amended return (or receiving a letter from the IRS that requests payment for an error), the IRS will assess a penalty in addition to the interest charges on the late payment. The penalty is usually half of 1% of the unpaid amount for each month or part of a month the tax is not paid. More information on these charges can be found on the IRS instructions for Form 1040X.

4. Mail the form

The IRS only accepts the 1040X completed on paper and mailed the old-fashioned way. It’s best to spend the extra few dollars to mail your return at the post office using a certified mail form. However, even though you must mail your 1040X, you can still pay online or by phone.

5. Amend your state return

Almost done … but you will need to amend your state return, too. Depending on where you live, you might be able to file your amended state return online. For instance, in South Carolina an amended return must be mailed, but in New York you can submit it online.

A minor hassle

Whether it’s a simple math error or side-gig income you forgot to report, there are a number of reasons that you may need to amend your tax return. And, of course, it could be a bit of a hassle, but it’s nowhere near as cumbersome and time-consuming as doing your taxes the first time. Fortunately, it’s relatively easy to do and by following these steps, your return should be all patched up in no time.

Kathryn Hauer is a certified financial planner and fee-only investment advisor with Wilson David Investment Advisors in Aiken, South Carolina. 

This article also appears on Nasdaq.